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Items of an energy-saving nature
     2. The following descriptions of items of an energy-saving nature are specified for the purposes of section 312(5)(c) of ITOIA 2005—

(a) hot water system insulation;

(b) draught proofing;

(c) solid wall insulation; and

(d) floor insulation.

Restrictions on relevant expenditure to be taken into account: general
     3. —(1) The maximum amount of the relevant expenditure which may be taken into account in calculating the deduction is £1,500 per dwelling-house.

    (2) Paragraph (1) applies irrespective of the number of persons incurring relevant expenditure or entitled to a deduction in respect of a dwelling-house.

    (3) If the person entitled to the deduction has received a contribution from any other person towards the relevant expenditure incurred, that contribution shall be excluded in calculating the relevant expenditure incurred by the person entitled to the deduction.

    (4) Further rules (to be applied in the order stated) are set out in—

(a) regulation 4 (first further rule: apportionment of relevant expenditure benefiting more than one property);

(b) regulation 5 (second further rule: restriction of relevant expenditure to the maximum amount);

(c) regulation 6 (third further rule: apportionment of relevant expenditure if a dwelling-house or building is owned jointly or in common or is subject to differing estates or interests).

First further rule: apportionment of relevant expenditure benefiting more than one property
     4. —(1) This regulation applies to relevant expenditure which is incurred in acquiring and installing an energy-saving item—

(a) in more than one dwelling-house,

(b) in a building containing more than one dwelling-house, or

(c) in a building containing one or more dwelling-houses and one or more properties which are not dwelling-houses.

    (2) The relevant expenditure must be apportioned on a just and reasonable basis to all the properties which benefit from it.

    (3) The amount of the relevant expenditure for which a deduction is allowable in respect of a dwelling-house shall not exceed the amount which is apportioned to that dwelling-house.

Second further rule: restriction of relevant expenditure to the maximum amount
     5. —(1) This regulation applies if the relevant expenditure benefiting a particular dwelling-house (including any relevant expenditure apportioned to the dwelling-house under regulation 4) exceeds the maximum amount.

    (2) The relevant expenditure must be restricted to the maximum amount.

Third further rule: apportionment of relevant expenditure if a dwelling-house or building is owned jointly or in common or is subject to differing estates or interests
     6. —(1) This regulation applies if relevant expenditure is incurred benefiting a dwelling-house and the dwelling-house or the building containing it—

(a) is owned jointly or in common by the person entitled to the deduction and by other persons, or

(b) is subject to differing estates or interests.

    (2) The relevant expenditure (restricted if necessary to the maximum amount) must be apportioned on a just and reasonable basis.

    (3) The amount of the deduction to which the person entitled to it is entitled shall not exceed the amount apportioned to that person in accordance with paragraph (2).

Further provisions
     7. —(1) This regulation applies if any question arises under regulations 3(3) or 4 to 6 as to the amount of the deduction to which a person may be entitled.

    (2) The amount shall be treated as if it were an amount specified in a paragraph of subsection (1) of section 42 of ICTA 1988[2] (appeals against determinations under sections 34 to 36 or Chapter 4 of Part 3 of the Income Tax (Trading and Other Income) Act 2005), and the procedure set out in that section shall apply accordingly.

Revocation of the Energy-Saving Items Regulations 2007 (S.I. 2007/831)
     8. The Energy-Saving Items Regulations 2007 (S.I. 2007/831) are revoked.


Dave Watts

Steve McCabe
Two of the Lords Commissioners of Her Majesty's Treasury

15th November 2007

[2] 1988 c.1. Section 42 was amended by paragraph 24 of Schedule 1 to the Income Tax (Trading and Other Income) Act 2005.back

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