CA90510 - Structures and buildings allowance (SBA): relevant interest: general rule

CAA01/S270DA, S270DB

SBA can only be claimed by the person who holds the relevant interest in a building.

The general rule is that the relevant interest in relation to any qualifying expenditure is the interest in the building to which the person who incurred the expenditure on its construction was entitled when the expenditure was incurred.

Since construction expenditure may be incurred at different times and by different people there may be several relevant interests in a building.  This could result in more than one claim for a building, with different persons claiming qualifying expenditure on the building attributable to their own relevant interests. Please see CA90800 for examples.

When the building is sold, the relevant interest is treated as held by the seller, not the purchaser, on the day of the transfer.

Reversionary interest

If the person who incurred the expenditure on construction was entitled to more than one interest in the building when the expenditure was incurred, if one of those interests is reversionary on all the others, the reversionary interest is the relevant interest for the purposes of SBA.

The reversionary interest is the interest which reverts back to the person incurring the expenditure.

Interest acquired when construction is complete

If a person who incurs expenditure on the construction of a building has an entitlement to an interest in the building on, or as a result of, completion of the construction, they are treated as having had that interest when the expenditure was incurred.

Leases

There are special rules relating to the relevant interest when a lease is granted CA90600, and also following termination of a lease CA90800. 

Highway undertakings

There are also special rules dealing with the relevant interest where a person operates a highway undertaking CA94525.