Structures and buildings allowances
Produced in partnership with Martin Wilson
Structures and buildings allowances

The following Tax guidance note Produced in partnership with Martin Wilson provides comprehensive and up to date legal information covering:

  • Structures and buildings allowances
  • Qualifying expenditure
  • Who can claim SBAs
  • How to claim SBAs
  • Interaction with capital gains calculations
  • Mixed expenditure and mixed use of assets
  • Leases
  • Anti-avoidance
  • Exclusions
  • Evidence of entitlement for SBAs—the allowance statement requirement

FORTHCOMING CHANGE: The Conservative Manifesto and Costing Document for the December 2019 general election included a commitment to raise the rate of SBAs to 3%, presumably with a consequential effect on a building’s deemed 50-year life for the purpose of this allowance.

Expenditure incurred on or after 29 October 2018 on non-residential structures and buildings which does not qualify for plant and machinery allowances will normally instead qualify for structures and buildings allowances (SBAs).

SBAs were introduced by the Capital Allowances (Structures and Buildings Allowances) Regulations 2019, SI 2019/1087, under a power in Finance Act 2019. A Technical Note was issued on Budget day, 29 October 2018, after which there was consultation on the draft legislation, before the final regulations came into force on 5 July 2019.

Qualifying expenditure

SBAs are available for capital expenditure incurred on or after 29 October 2018 on the construction or acquisition of most non-residential structures and buildings located in the UK or overseas, provided the taxpayer is within the charge to UK tax.

Preparing land as a site for the construction of a building or structure qualifies for SBAs. Capital expenditure on renovations, conversions, etc is treated as if it were expenditure on the construction of that part of the asset for the first time.

The first use of the building or structure, after the relevant