Structures and Buildings Allowance

 The Structures and Buildings Allowance provides tax relief for new commercial properties and renovations. Relief is at 3% per year given on a straight-line basis, e.g., £200,000 project costs allow £6,000 per year for 33 years. The allowance is based on initial construction or renovation costs and, if the property is sold, the allowance transfers to the purchaser.

  Claims start when the building is first used and are reduced pro-rata for periods less than 12 months. When the property is sold, the allowance that has been claimed increases the taxable capital gain.

  Eligible structures include shops, offices, factories, warehouses, walls, bridges, and tunnels. For properties bought from developers, the cost of the land is excluded from the allowance claim.

  The property must be used in a UK business that is subject to UK Income Tax or Corporation Tax, including trades, professions and property businesses. Hotels and care homes also potentially qualify for the allowance. The allowance applies to properties in the UK and to overseas properties. An additional Structures and Buildings Allowance claim can be made for a property if it is renovated or improved at a later date.

   For advice on tax matters, tailored to the particular circumstances, please contact us.