Owner-Managed Businesses

Structures and buildings allowance

Produced by Tolley
  • 05 Jan 2022 14:50

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Structures and buildings allowance
  • What is structures and buildings allowance (SBA)?
  • What expenditure qualifies for SBA?
  • SBA’s on the acquisition of building
  • Renovations, conversions and repairs
  • Plant and machinery and SBA
  • Who can claim SBA?
  • SBA ― qualifying activity
  • SBA and meaning of residential use
  • Amount of SBA
  • More...

Structures and buildings allowance

What is structures and buildings allowance (SBA)?

From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA.

Except where the enhanced rate for freeport tax sites applies, SBA is given at an annual rate of 3% (from 1 April 2020 for corporation tax and 6 April 2020 for income tax, prior to April 2020 the rate was 2%), of the qualifying expenditure on a straight-line basis over 33 and 1/3 years, as a deduction in calculating the taxable profits of a trade or other qualifying activity.

The 3% rate can be claimed on all expenditure, even where the building or structure was bought into use before April 2020. Where a chargeable period spans 1 April 2020 (corporation tax) or 6 April 2020 (income tax) the rate of 2% will apply for days before the relevant date and 3% for the days after that date. Any shortfall in allowances due to a business claiming 2% prior to April 2020 can be claimed in the last chargeable period in which an allowance is available, ie when the period of 33 and 1/3 years ends, but only if the business which held the building on 1 April 2020 (corporation tax) or 6 April 2020 (income tax) still holds the same interest in the building at the end of the 33 and 1/3 years.

An enhanced rate of SBA applies to expenditure on buildings

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information


Popular Articles

Requirement for trust accounts

Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every

19 Oct 2021 23:08 | Produced by Tolley Read more Read more

Loan notes and qualifying corporate bonds (QCBs) and non-QCBs

On the disposal of the shares in a company, a seller may receive loan stock in the acquiring company as consideration or part consideration for the sale. For tax purposes, loan notes are either qualifying corporate bonds (QCBs) or non-QCBs (NQCBs). The expression ‘corporate bond’ is a general

21 Dec 2021 16:32 | Produced by Tolley Read more Read more

Payment of tax due under self assessment

Normal due dateIndividuals are required to pay any outstanding income tax, Class 2 and Class 4 national insurance and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2021 for the 2019/20 tax year). From 6 April 2020, UK resident individuals who

27 Sep 2021 07:14 | Produced by Tolley Read more Read more