CA90200 - Structures and buildings allowance (SBA): outline: commencement
CAA01/S270AB
When construction begins
The SBA is intended to stimulate investment in the construction of new non-residential structures and buildings and on capital costs of renovations on or after 29 October 2018.
The SBA is therefore only available where construction begins on or after 29 October 2018 CA90100 and on expenditure incurred on or after 29 October 2018. For the date when expenditure is incurred, see CA11800.
One of the key features of the SBA is that relief is not available for structures or buildings where a contract for the physical construction works is entered into before 29 October 2018. Additionally, for structures or buildings constructed ‘in house’, relief is not available where the construction activity began before 29 October 2018.
Construction contracts
The date of the construction contract will determine the date on which construction is treated as beginning for the purposes of the SBA. If any contract for construction is entered into before 29 October 2018, the SBA will not be available on any of the construction costs of that building.
Construction is treated as beginning before 29 October 2018 if any contract for works to be carried out in the course of the construction of that particular building is entered into before that date.
A contract may take different forms, for example it may be an email exchange confirming works will take place.
No contract
The start of construction will be the date the physical works commence when:
- no contract is entered into, as may be the case where construction is be carried out ‘in-house’ by employees rather than by using external contractors
- the contract is entered into only after construction works commence.
Such works will include capital expenditure on site preparation CA93250 but not expenditure on land alteration within CAA01/S270BG CA94010.