Structure and Buildings Allowances

Structures and Buildings Allowances were introduced in late 2018 amid a myriad of other fundamental capital allowances changes to try and redress some inequalities in the current tax relief system.

This tax relief provides capital allowances for expenditure incurred on the construction or acquisition of a building.  Expenditure which may qualify for Plant and Machinery Allowances is excluded from qualifying and therefore it applies to predominantly the structural, compartmentalisation and finishes aspects of a property.  It is most akin to the previously repealed Industrial Buildings Allowances.

The allowances were originally given at 2% per annum but this has since increased to 3% per annum, so all the relief if realised over 33 years or so.  Certain restrictions apply for planning costs, amongst others.

There are no balancing adjustments for expenditure on this tax relief, as with Plant & Machinery Allowances, but adjustments may be made to the capital gains calculations on disposals.  When a property is sold, the Seller must cease claiming and if entitled to do so, a Buyer may commence making claims on the remainder of the term of allowances.  An ‘allowances statement’ must be transferred documenting the salient property and claim details.