CA94755 - Enhanced SBA in freeport and investment zone special tax sites: Apportionment

CAA01/S270BNB

There are two circumstances where qualifying expenditure must be apportioned between special tax site qualifying expenditure CA94751 and other qualifying expenditure.

Apportionment under CAA01/S270BNB must be on a just and reasonable basis.

Building partly in a special tax site

Where a building is situated partly inside a special tax site and partly outside a special tax site, the qualifying expenditure must be apportioned.

The qualifying expenditure apportioned to the part of the building situated in a special tax site is special tax site qualifying expenditure provided it meets all of the other conditions CA94751. This amount of special tax site qualifying expenditure is eligible for the enhanced SBA.

The qualifying expenditure apportioned to the part of the building situated outside a special tax site is other qualifying expenditure. This amount of qualifying expenditure is not eligible for the enhanced SBA but remains eligible for the normal rate of SBA.

The relevant date for considering whether a building is situated inside or outside a special tax site for the purposes of apportionment under CAA01/s270BNB(2) is the later of:

• the date on which the building is first brought into non-residential use
• the date on which the qualifying expenditure is incurred.

Part of building brought into use on or before the applicable sunset date

For qualifying expenditure to be special tax site qualifying expenditure, the building must be brought into qualifying use on or before the applicable sunset date in relation to the special tax site concerned CA94751.

Where part of a building is brought into qualifying use on or before the applicable sunset date and part is brought into qualifying use after the applicable sunset date, the qualifying expenditure must be apportioned.

The qualifying expenditure apportioned to the part of the building brought into qualifying use on or before the applicable sunset date is special tax site qualifying expenditure provided it meets all of the other conditions CA94751. This amount of special tax site qualifying expenditure is eligible for the enhanced SBA.

The qualifying expenditure apportioned to the part of the building brought into qualifying use after the applicable sunset date is other qualifying expenditure. This amount of qualifying expenditure is not eligible for the enhanced SBA but remains eligible for the normal rate of SBA.