A 2%, straight line allowance over a period of 50 years on construction costs of building new, non-residential structures and buildings used in qualifying activities.
Neither land nor dwellings will be eligible for relief, nor will the costs of obtaining planning permission. However, the claimant must have an interest in the land on which the structure is constructed to claim the allowance.
Where there is mixed use of a building, the relief would be apportioned.
Relief is available on the original cost of construction or the renovation costs. Where a building has appreciated in value, there will be no increase in the amount eligible for relief.
Where the building is sold, there will not be a system of balancing allowances or balancing charges. The purchaser will be able to claim the allowance subject to the structure or building being used in a qualifying trade over the remainder of the 50-year period from when the original cost was incurred.
The relief would apply to most trades, professions or vocations. A UK or overseas business that is an “ordinary” business for the purposes of the Capital Allowances Act 2001 would also qualify.
Buildings used as hotels and care homes will qualify for the relief. University accommodation or building primarily used or intended to use for residence will not qualify.
Relief for expenditure on overseas structure of buildings will be available on the same basis as for a UK structure or building. Where the building is used for a qualifying trade and the profits of the activity are taxable in the UK.
Businesses that build new, commercial structures or buildings in the UK or abroad for qualifying trading activities will be able to claim capital allowance along with capital allowances on integral features of the building.