Since the old Industrial Buildings Allowance was phased out in 2010, capital allowances have only been available for plant and machinery, and there has been no relief available for the capital investment to construct most structures or buildings themselves.
Relief will be provided on eligible construction costs incurred on or after 29 October 2018 once the building comes into use. Capital expenditure on renovations or conversions of existing commercial structures or buildings will also qualify (with relief for additional capex calculated separately).
Expenditure on land or acquiring rights over land will not qualify for relief. This includes any legal costs and stamp duty, or any costs attributable to the obtaining of planning permissions.
SBA expenditure will not qualify for the Annual Investment Allowance (“AIA”), however expenditure on integral features and fittings of a structure or building that are currently allowable as expenditure on plant and machinery, will continue to qualify for writing down allowances for plant and machinery including the AIA up to its annual limit.
On disposal of the relevant asset, there will be no balancing adjustment; but rather, the purchaser takes over the remainder of the allowances written down over the remaining part of the 50-year period.
On disposal of a structure on which allowances have been claimed, a person’s allowable cost of the asset for capital gains purposes will be reduced by the total amount of relief claimed.
Gary Bloch FCCA
Managing Partner
For more information please contact Gary:
gary.bloch@fkgb.co.uk
050 578 9154
