The Government has recently issued new guidance on claiming capital allowances for commercial buildings. If you build (or renovate), buy or lease a commercial building (that was constructed as a commercial building and not as residential and then converted) AND all related construction contracts were signed on or after 29 October 2018, you may be able to claim a 2% tax relief per year (for up to 50 years) if the building meets certain criteria.

The allowance can only be claimed on construction costs (this includes design fees and the costs of preparing the site for construction) as follows:

  • Building or renovating a building: the amount of the construction costs. This applies even if you only lease the building.
  • Buying an unused building:

            (i) from someone who is not a developer: the lower of the purchase
                price or the original construction cost
           (ii) from a developer: the amount you paid to the developer - LESS in
                each case excluded items (click here for a list of excluded items).

  • Buying a used building

            (i) from someone who is not a developer –the same amount that the
                previous owner was entitled to claim.
           (ii) from a developer: the developer’s construction costs.
You can find out more here.

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