Update on Structures and Buildings Allowance
Chancellor Philip Hammond delivered the Spring Statement on Wednesday 13 March 2019 amidst all the Brexit debates.
In his speech the Chancellor provided an update on the economy and responded to the Office for Budget Responsibility forecasts. In addition he launched consultations on various aspects of the tax system together with updates on earlier consultations.
One area subject to consultation is the Structures and Buildings Allowance (SBA). The SBA gives relief for expenditure on certain structures and buildings. The allowance is available for new structures and buildings intended for commercial use, and the improvement of existing structures and buildings. The SBA will be also available on the cost of converting or renovating existing premises to qualifying use. Relief is limited to the original cost of construction or renovation and given across a fixed 50-year period, at an annual flat rate of 2% regardless of changes in ownership.
Only certain expenditure will qualify. The structures or buildings must be brought into use for qualifying activities. These include trades, professions or vocations and certain UK or overseas property businesses - essentially commercial property lettings.
Relief will be given on eligible construction costs incurred on or after 29 October 2018. Where a contract for the physical construction work is entered into before this date, relief is not available. The consultation on draft legislation is open until 24 April 2019.
Internet links: WMS | Consultation