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New capital allowances rules

Steven Bone explores the unexpected tax relief for buildings unveiled in the 2018 budget.

The chancellor, Philip Hammond, introduced a new capital allowance for construction expenditure on nonresidential structures and buildings – and significantly increased the annual investment allowance available for plant and machinery – in a two-pronged attempt to boost investment in the autumn budget.

For expenditure incurred from 29 October 2018, the new structures and buildings allowance (SBA) gives 2% flat-rate tax relief for building, altering or refurbishing most commercial structures and buildings, whether they be in the UK or abroad.

Use it or lose it.

The SBA looks like an adapted throwback to industrial buildings allowance (IBA). However, there are marked differences, not least that although SBAs will be available for a wider range of properties, the tax relief will be given half as quickly.

This is an extract from the Business & Management Magazine, Issue 270, December/January 2018.

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