Budget 2018: the chancellor has announced that the government will introduce a new Structures and Buildings Allowance (SBA) for new non-residential structures and buildings.
Relief will be provided on eligible construction costs incurred on or after 29 October 2018 at an annual rate of two percent on a straight-line basis once the property is brought into qualifying use.
- This will apply regardless of any changes in ownership; there will be no balancing adjustments on sale.
- The building or structure must be used in a trade, profession, vocation, UK or overseas property business that is an “ordinary” business (not a furnished holiday let business) or in managing the investments of a company with investment business, within seven years of the expenditure.
- Expenditure on renovations or conversions of existing commercial structures or buildings will qualify.
- Expenditure on dwellings or buildings that function as dwellings with not qualify, including home offices which are an integral part of the home. There will be a consultation on the definition of a dwelling but hotels and care homes will qualify.
- SBA expenditure will not qualify for the Annual Investment Allowance
Useful links:
External link
HMRC: Capital allowances for structures and buildings technical note
