CA93410 - Structures and buildings allowance (SBA): qualifying expenditure: qualifying capital expenditure: qualifying capital expenditure incurred on construction
CAA01/S270BB
Where a person incurs the costs of constructing a building, either directly, or through hiring a building contractor, if they hold the relevant interest when that building is brought into use for the first time, the capital expenditure they incurred on the construction of the building is ‘qualifying capital expenditure’.
In other words, the capital expenditure incurred on construction is qualifying capital expenditure if the relevant interest in that building has either:
- not been sold
- been sold, but only after the building has been brought into non-residential use.
This construction cost will be the amount of qualifying expenditure for each subsequent holder of that relevant interest. See example in CA91400.
Expenditure on renovation or conversion, or on repairs that are incidental to a renovation or conversion, is treated as if it were expenditure on the construction of a building for the first time CA93200.
Fitting out works
Capital fitting out costs will qualify for SBA provided all other conditions are met, including that they do not qualify for plant and machinery allowances. If completed at the same time as or as part of the same contract as the construction of the building itself, the costs will be incurred on the same date and the 33 1/3 year claim period will be the same as that of the construction costs for the building.
If fitting out works are contracted for and undertaken at a different time to the construction of the building (as will usually be the case for tenanted buildings) the 33 1/3 year claim period for SBA will be different to that of the construction costs for the building itself, and must be claimed separately.