188体育

CAA01/S270AA(5)

As with other capital allowances, the SBA is given for a chargeable period.聽

The basic rule is that, for a chargeable period of one year, the allowance is 3% of the qualifying expenditure.聽 This is calculated on a straight line basis, which means that qualifying expenditure may be relieved in full over 33 1/3聽years.

For a chargeable period of one year an enhanced rate of SBA of 10% over 10 years is available for special tax site qualifying expenditure CA94750.

Whether a person constructed a qualifying building or bought it unused, the annual rate of allowance is 3%. The SBA is available to be claimed on a straight line basis over 33 1/3 years CA90100 from the date of the building鈥檚 first non-residential use CA92500.

The amount of the allowance is reduced if the building was brought into qualifying use part way through a year CA91400.聽 For example, if the claimant鈥檚 year end is 31 December and the building was brought into qualifying use on 1 July, the allowance will be proportionally reduced to six-twelfths of the allowance available for a full twelve months.

Example of commencement of use and subsequent sale

Tom鈥檚 period of account runs from 1 January to 31 December. Tom constructs a building costing 拢1 million which is brought into qualifying use on 1 April. For the chargeable period during which the building is brought into use, Tom can claim 拢1 million 脳 3% 脳 (9 梅 12) = 拢22,500. For subsequent years, Tom will be able to claim 拢1 million 脳 3% = 拢30,000 per year.

If Tom sells the building to Veronica, Veronica can claim the SBA on the original construction costs, at the same rate of 3% per year, which is 拢30,000 per year for the remainder of the 33 1/3聽year period. The purchase price Veronica pays does not change the amount of the SBA available.

See CA11510 for more information on chargeable periods.