Structures and Buildings Allowance

Gary Hughes

Special Projects Manager

This blog explains the qualifying expenditure and the conditions for Structures and Buildings Allowance.


The Structures & Buildings Allowance (SBA) was introduced on 29th October 2018. Subsequently, qualifying expenditure on constructing a commercial building or structure, and in certain circumstances expenditure on acquiring a commercial building or structure, may qualify for the SBA. The SBA is given at an annual rate of 2% of qualifying expenditure on a straight-line basis over 50 years.

Qualifying Expenditure:

The SBA can be claimed for capital expenditure incurred on the construction or purchase of a qualifying building. The construction must begin on or after 29th October 2018 and the contract for construction works must be entered into on or after that date. The SBA can also be claimed on renovation or conversion expenditure as part of an existing building.

The costs of acquiring the land on which the building is constructed does not qualify for SBA, but preparing the land as a site for the construction of the building does qualify for SBA.

Qualifying Use:

The SBA cannot be claimed on residential buildings, and its application is strictly limited to non-residential buildings. Prohibited residential use includes use as a dwelling-house and residential accommodation for school pupils, students, armed forces, etc. Furnished holiday lettings are also excluded.

Mixed Use:

If the building is used for more than one purpose the qualifying expenditure must be apportioned between the different uses on a just and reasonable basis and the SBA given to each part which qualifies.

Allowance Statement:

The building owner who incurred the qualifying expenditure must make the statement. Subsequent purchasers must obtain a copy of the statement to secure a claim for the SBA.

The allowance statement is a written statement which should include:

  • Information to identify the building, such as address and description.
  • The date of the earliest written construction contract.
  • The total qualifying costs.
  • The date the asset was first brought into non-residential use.

There is no requirement to submit the allowance statement to HMRC, but we would strongly recommend it be retained as part of the core business records.

Building Disposal:

When a building that has had SBAs claimed on it is sold, the seller’s SBA stops. The SBA is then transferred to the new owner who, if entitled, can claim the annual SBA of 2% of the original qualifying expenditure for the remainder of the 50-year period. In the year of disposal an apportionment may be needed to reflect ownership periods.

It is important to note that unlike other capital allowances there are no balancing allowances or charges where the SBA is concerned. Instead, adjustments are potentially required when preparing the capital gains tax computation on disposal.

Where the building is demolished the allowances cease to be available. No balancing adjustments are made. A demolition triggers a deemed disposal for capital gains purposes.


Whilst not an overly generous allowance (a 2% straight line basis means it will take 50 years to receive the full benefit) when considering the penal measures introduced which make residential buy-to-let property ownership unattractive, to receive any form of allowance on property related matters must be seen as a bonus.

How Hallidays can help:

If you would like further advice please contact our expert tax team on 0161 476 8276, email or visit to learn more.


The information contained herein is of a general nature and is not intended to be received as formal professional advice. Whilst we endeavour to provide accurate information, there can be no guarantee that the information is accurate as of the date it is received, or that it will continue to be accurate in the future, due to legislative changes. It is therefore important that before you act upon any information contained herein you seek appropriate professional advice to take account of your exact circumstances.

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