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

The following Tax practice 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 much can be claimed
  • 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

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 announced in the Budget 2018 on 29 October 2018, and were implemented by regulations that 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 expenditure was incurred, must be non-residential. If the first use of a building is residential, but the building is later changed to non-residential use, SBAs may be available on any conversion costs, but not on the original cost of construction.

In a similar way to plant and machinery allowances (see Practice Note: Contributions in respect of expenditure on plant and machinery), a taxpayer may claim SBAs if a financial contribution is made to another person in respect of

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