The Structures and Buildings Allowance (SBA)

The Structures and Buildings Allowance gives relief for the cost of constructing or acquiring commercial buildings and structures, on top of the allowances for plant and integral features.

How it works

SBA gives a 3% a year writing-down allowance on a straight-line basis, so the cost is relieved over 33 and one third years. It applies to qualifying capital expenditure on non-residential structures and buildings, including construction, renovation and some acquisition costs. Residential property is excluded.

What qualifies

Qualifying expenditure is on the fabric of the building, as distinct from plant and integral features, which go through the capital allowances route instead. You need evidence of the expenditure, such as an allowance statement, to claim.

The clawback on sale

There is a sting. Amounts claimed as SBA reduce your base cost for capital gains purposes, so the relief is partly clawed back through a larger gain when you sell. Factor this into any hold-or-sell decision.

Worth claiming

Even with the clawback, spreading relief at 3% a year improves cashflow and is worth claiming on new-build and substantially refurbished commercial property. Take advice on splitting expenditure correctly between SBA and the faster plant-and-integral-feature allowances.

What is the Structures and Buildings Allowance rate?

3% a year on a straight-line basis, so the cost is relieved over 33 and one third years.

Does the SBA affect my CGT on sale?

Yes. Amounts claimed as SBA reduce your base cost for capital gains, so the relief is partly clawed back through a larger gain on sale.