Capital Allowances for Structures and Buildings

The Structures and Buildings Allowance (SBA) offers tax relief towards the cost of the purchase, construction or renovation of a structure for all contracts signed on or after 29 October 2018.

The allowance enables taxpayers to claim the original market value on construction costs, including fees for design, preparing the site for construction, construction works, renovation, repair and conversion costs and fitting out works.

Claims information

Leasing a structure

Claims can be made on construction costs, even if the structure is leased from someone else.

Buying a structure from a developer

If the structure is purchased unused from a developer, the SBA can be claimed on the price paid to the developer, after deducting the items that cannot be claimed for.

If the structure is sold by a developer, has been sold more than once and the claimant is the first person to use it, the SBA can be claimed on the lower of either

  • The price paid to the developer when they sold it; or
  • The price paid for the structure.

If purchasing a used structure from a developer, the SBA can be claimed on the developer’s construction costs.

Buying a structure from someone that is not a developer

If buying an unused structure, after deducting items that cannot be claimed for, the SBA can be claimed on the lower of either

  • The price paid for the structure; or
  • The original construction cost.

If buying a used structure, the SBA can be claimed at the same level as the previous owner was entitled to claim.

Click here for further details on costs that cannot be claimed for through the SBA.


In order to be eligible to claim the SBA, the structure must

  • Not have been used as a residence the first time it was used or during the claim period;
  • Be used for a qualifying activity, which is taxable in the UK – this includes any trades, professions and vocations, a UK or overseas property business (except for residential and furnished lettings), managing the investments of a company, mining, quarrying, fishing and other land-based trades such as running railways and toll roads; and
  • Have an allowance statement.

Applicable rates

Corporation Tax

29 October 2018 to 31 March 2020: 2%

1 April 2020 onwards: 3%

Income tax

29 October 2018 to 5 April 2020: 2%

6 April 2020 onwards: 3%

The allowance period

The allowance period is 33 and one third years from the allowance period start date.

Claims can be made for the whole of the allowance period, starting from the later of

  • The date the building is first used for a non-residential purpose; or
  • The date the qualifying expenditure is incurred.

Additional qualifying costs can be grouped together, with claims started on the first day of the next accounting period.

The SBA can continue to be claimed for the rest of the allowance period if

  • A structure is purchased from another person who has already claimed;
  • The structure is used for a qualifying activity; or
  • The structure is out of use following a period in which it was used for a qualifying activity.

When the structure is sold or disposed of, the SBA will end. A copy of the allowance statement should be passed onto the new owner so that they can claim any remaining allowances.

How to claim

The claimant must make their SBA claim on their tax return.

An allowance statement is required for the structure and must include

  • Information to identify the structure, such as address and description;
  • The date of the earliest written contract for construction;
  • The total qualifying costs; and
  • The date that you started using the structure for a non-residential activity.

If the structure is used, a copy of the allowance statement must be obtained from the previous owner.