Structures and Buildings Allowances

Structures and Buildings Allowances (SBAs) were introduced in the 2018 Autumn Budget; and are given on eligible construction costs incurred on or after 29 October 2018 for new non-residential structures and buildings. SBAs were introduced as “a long term commitment to improving the competitiveness of the UK as a destination for investment”

Initially, SBAs were given as a straight line relief at 2% for 50 years in respect to eligible capital expenditure on new commercial structures and buildings, including costs for new conversions or renovations, but excluding land. However in his Budget statement on March 11^th 2020, Chancellor Rishi Sunak MP, accelerated the relief boosting the writing down allowances to 3% p.a. and thus shortening the period to 33 & 1/3^rd years with effect from April 2020.

The Budget also made a number of minor technical changes too, improving (or clarifying) the rather complex and convoluted legislation and also restricting SBAs where Research & Development Allowances (under Part 6 CAA2001) may also been available to prohibit abusive double claims!

Interaction with other Tax Reliefs

Expenditure eligible for the long standing other Capital Allowances, Plant & Machinery Allowances (PMAs) and Integral Feature Allowances (IFAs) will continue to be eligible for these reliefs and are ineligible for SBAs. Furthermore, expenditure eligible under Repairs & Maintenance (R&M) and/or Land Remediation Tax Relief (LRTR) are also NOT eligible for SBAs and thus it is essential a thorough analysis of the project expenditure is undertaking in establishing the available tax relief and to optimise your tax savings.  Additionally, SBAs expenditure will not qualify for the accelerated relief from the 100% Annual Investment Allowances (AIAs). 

Restrictions

SBAs are not eligible against Student Accommodation properties, nor Furnished Holiday Lettings (FHLs) as HMRC has specifically excluded these categories of property. Additionally, there is a CGT adjustment required against SBAs claimed upon disposal, making them somewhat more complicated, as this does not apply to the other Capital Allowances categories.

How we can help

For tax payers to benefit from all of the available capital allowances relief and truly optimise their tax savings, they will need to undertake some form of detailed analysis of the project expenditure into the various forms of allowances relevant.

For more information call a member of our team on 0345 230 6450 or by completing the adjacent enquiry form for a no obligation, no fee initial discussion.

From our experience you’ll most likely be surprised at what we can achieve.