Answers · UK 2025/26
What is the Structures and Buildings Allowance (SBA) in the UK?
The Structures and Buildings Allowance (SBA) provides 3% straight-line tax relief per year on the cost of constructing or renovating commercial buildings and structures. It was introduced in October 2018 and applies to qualifying expenditure on non-residential buildings. Residential property is excluded, and relief continues until the allowance pool is exhausted (33.3 years).
Full answer
The Structures and Buildings Allowance (SBA) was introduced for expenditure incurred on or after 29 October 2018 under Capital Allowances Act 2001, Part 2A. Rate and mechanics: 3% per year on a straight-line basis on qualifying construction or renovation costs of commercial structures and buildings. There is no balancing allowance or balancing charge on disposal -- the allowance pool follows the building and must be transferred to the new owner at disposal, continuing at 3%/year on the original qualifying cost. What qualifies: commercial premises including offices, factories, warehouses, hotels, retail premises, and agricultural buildings. Qualifying expenditure includes construction costs, legal and professional fees directly related to construction, and renovation costs bringing a building back into use. What does not qualify: residential property (including student accommodation), the cost of land, planning costs, and assets that are plant and machinery (use AIA or writing down allowances instead). Interactions: SBA and AIA can be claimed on the same project for different elements -- e.g., AIA on fixtures and fittings, SBA on the building structure itself. Full expensing (100% first-year allowance) introduced from April 2023 does not extend to SBA -- the 3% limit remains. Proceeds on sale: when a commercial property with unclaimed SBA is sold, the buyer takes over the remaining SBA pool at the original qualifying cost and 3%/year rate. The seller does not get any balancing allowance. The SBA allowance is available to both companies (against corporation tax) and unincorporated businesses (against income tax). HMRC guidance is in Capital Allowances Manual CA90000.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.