The cap on spell damage is 1/2 the base amount of the spell. It applies to both min and max. For dots, sum up the total damage it does over the full duration, and then do the 1/2 calculation. The difference is that all SD is applied to the initial hit, and the other ticks stay at the same amount.
For example, say you have a nuke that does 1000-2000 damage. If you equipped +500 SD (without increasing int or base damage or anything like that) the spell would become 1500-2500.
If you added another +500 SD it would become 1500-3000; your low end will be capped but your high end would still be able to increase.
However, if you added yet another +500 SD it would do nothing. Both your min and your max would be capped at 1.5 their original amount.
There are two exceptions to this; one is critting. Critting increasing your base spell damage...so if you crit for 30% your 1500-3000 spell would do 1950-3900, so you'd be able to add 450 to your low end and the full 500 to your high end. So you'd end up with a spell that does 2400-4400.
The other is increasing your base spell/CA damage, but there's only a couple things in the game that'll do this for you. Good luck battling others for a Dark Orb of the Chosen or a Bloodthirsty choker
So morale of the story is get as much +spelldamage until your spell maximum is close to being capped out, since paladins usually have close to 100% spell crit they can utilize higher amounts of SD than it would appear at first glance.
I'm curious as to why more raid paladins do not go WIS line purely for the end ability. At first glance it looks like a 2% base increase, so not only would you get 2% more dps, you'd also unlock an additional 2% if you're overcapped on spelldamage. Is it not a base increase? My pally doesn't have enough SD to test it yet
