Finance Act 2020

29 Structures and buildings allowances: rate of relief

(1) Part 2A of CAA 2001 (structures and buildings allowances) is amended as follows.

(2) In section 270AA (application of Part 2A)—

(a) in subsection (2) (entitlement to an allowance), at the beginning of paragraph (b) insert “the beginning of”,

(b) in subsection (2)(b)(ii), for “50 years” substitute “33 1/3 years”, and

(c) in subsection (5) (basic rule: allowance for a chargeable period of one year), for “2%” substitute “3%”.

(3) In section 270EA (proportionate adjustment in certain cases), in subsection (3)—

(a) in paragraph (a), for “(b)” substitute “(b)(i)”, and

(b) after paragraph (a) (but before the “or”) insert—

“(aa) the period mentioned in section 270AA(2)(b)(ii) expires part way through the chargeable period,”.

(4) In section 270EB (multiple uses), in subsection (2), for “2%” substitute “3%”.

(5) After section 270GC (but before Chapter 8) insert—

“CHAPTER 7A Adjustment for pre-April 2020 allowance

270GD Adjustment for pre-April 2020 allowance

(1) This section applies if—

(a) on the relevant date, a person is entitled to an allowance under this Part by reference to qualifying expenditure incurred in relation to a building or structure,

(b) the person does not dispose of the relevant interest in the building or structure before the end of the period mentioned in section 270AA(2)(b)(ii) (the “allowance period”), and

(c) at the end of the allowance period, the person is entitled to an allowance under this Part by reference to the qualifying expenditure mentioned in paragraph (a).

(2) The person is entitled to an additional amount of allowance for the chargeable period in which the allowance period ends.

(3) The additional amount of the allowance is 1% of the qualifying expenditure multiplied by the following fraction—

D / 365

where D is the number of days during the period beginning with 29 October 2018 and ending with the relevant date in respect of which an allowance under this Part by reference to the qualifying expenditure was made to the person.

(4) For the purposes of this section “the relevant date” means—

(a) for income tax purposes, 5 April 2020, or

(b) for corporation tax purposes, 31 March 2020.”

(6) The amendments made by this section are treated as having come into force—

(a) for income tax purposes, on 6 April 2020, or

(b) for corporation tax purposes, on 1 April 2020,

and in subsection (7) references to the commencement date are to be read accordingly.

(7) For the purposes of subsection (6), in relation to a chargeable period beginning before the commencement date and ending on or after that date, Part 2A of CAA 2001 applies as if—

(a) the part of the chargeable period falling before the commencement date, and

(b) the part of the chargeable period falling on or after that date,

were separate chargeable periods.