At Budget 2018 the chancellor announced the introduction of a new Structures and Buildings Allowance (SBA) for the construction costs of non-residential structures and buildings.

The new allowance is to 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.

In the technical note for the SBA, HMRC is seeking views on the following aspects of the proposed allowance:

Q1. To ensure the necessary exclusion of residential use, are there specific types of buildings or activities for which the draft legislation should provide?

 Q2. It has been necessary to reflect situations where the grant of a lease is akin to a sale of a property interest.  Is the proposed boundary of 35 years for the transfer of the SBA from a lessor to a lessee appropriate?

 Q3. Are there specific issues regarding overseas property that require specific provision in the draft legislation?

Q4. The government has proposed a period of disuse during which the structure or buildings retains its eligibility for relief – up to two years ordinarily, or up to five years where it substantially no longer exists following extensive damage. Are there any significant practical problems would prevent the proposed policy from working?

There are some features of the regime where HMRC believes that consultation will be more productive through meetings. HMRC and HM Treasury will set up these with interested parties.

Any representations should be sent to: This email address is being protected from spambots. You need JavaScript enabled to view it. by 31 January 2019


Budget 2018: Capital Allowances for Structures and Buildings

External link:

HMRC: Capital allowances for structures and buildings technical note