Living City Initiative (LCI)

Rented residential relief and commercial relief

These reliefs work by allowing you to claim capital allowances over a shorter period of seven years.

You claim 15% of the qualifying costs for the first six years and 10% in year seven. You can also claim any unused capital allowances from previous years.

If you have insufficient income in any year and do not get to use the capital allowances, they can be carried forward until such time as you can use them.

If you are not actively engaged in your trade, you are a passive investor. In this case, you cannot carry forward any unused capital allowances beyond the tax life of the building to which they relate.

What costs are covered?

You can only claim for the cost of work that is carried out in the qualifying period. The date of actual payment is not taken into account.

If you are a property developer or a connected person you cannot claim relief for investing in either the rented residential or commercial elements of the scheme. A connected person is someone who:

  • is related by blood or marriage to a property developer
  • is in a business relationship to a property developer
  • acts as a trustee for a trust of which the property developer is a beneficiary.

Next: Claiming Owner-Occupier residential relief