How to handle the structures and buildings allowance

The structures and buildings allowance (SBA) is intended to improve the international competitiveness of the UK. However, the allowance is given at a flat rate of 2% per annum, and a tax relief applied over a period of 50 years is unlikely to achieve this. The legislation contains some ambiguity and although HMRC has now provided detailed guidance, further guidance would be helpful as some gaps remain. The benefit of SBAs is reasonably modest, so advisers should not assume that it is always beneficial to claim them. If making a claim, check the conditions are met, carefully segregate costs and exclude residential/non-SBA expenditure from calculations. Adjustments are required for parts not in use or in non-qualifying use proportional adjustment. Finally, good record keeping for the SBA statement is essential, so full details must be obtained from the seller.