CA91700 - Structures and buildings allowance (SBA): allowances: research and development

CAA01/S270EC

There are situations where an allowance for the cost of the building may be available more quickly under CAA01/PART6 research and development allowances (‘RDA’). The SBA available following such a purchase is limited to prevent double relief so that allowances are available for the construction or acquisition of a building either by way of SBA or RDA, but not both.

Relevant interest sold, seller not entitled to RDA but purchaser is

Where RDA is available to the most recent purchaser of the relevant interest, the total amount of SBA available to that purchaser is limited to original qualifying expenditure CA93010 incurred on the construction or acquisition of the building less both of the following:

• the SBA to which entitlement arose in respect of the building prior to its sale to the most recent purchaser (or would have arisen had the building been in continuous qualifying use since it was first brought into non-residential use)
• the amount of RDA available in respect of the most recent purchaser’s expenditure on the acquisition of the building.

Relevant interest sold, seller entitled to RDA but purchaser is not

If such a building is subsequently sold to someone not entitled to RDA in respect of their expenditure on the acquisition of the building, the new purchaser’s SBA is limited to the lower of:

• the original qualifying expenditure incurred on the construction or acquisition of the building less the SBA to which entitlement arose in respect of the building prior to its sale (or would have arisen had the building been in continuous qualifying use since it was first brought into non-residential use)
• the capital sum paid by the purchaser for the relevant interest in the building.