What types of land-related expenditure are excluded from structures and buildings allowances under section 270BG?

Section 270BG excludes three categories of land-related expenditure: costs of acquiring land or rights in or over land (including fees, stamp duty land tax, land and buildings transaction tax, land transaction tax, and incidental costs), costs of altering land (land reclamation, remediation, and landscaping unless it creates a structure), and all costs of seeking planning permission.

Are land remediation and landscaping costs eligible for structures and buildings allowances?

Generally no. Expenditure on land remediation and landscaping is excluded as land alteration costs under section 270BG. However, if landscaping creates a structure, that element is not excluded. Additionally, certain preparatory costs may qualify under the site preparation rules in section 270BK, which provides an important exception to the land alteration exclusion.

Does the definition of 'land' in section 270BG include buildings or structures?

No. For the purposes of section 270BG, land does not include buildings or structures. The exception is in provisions dealing specifically with land remediation and related definitions of contaminated and derelict land under the Corporation Tax Act 2009. This ensures the exclusions target spending on land itself, not buildings or structures on it.

How are acquisition costs treated when calculating qualifying expenditure for structures and buildings allowances?

All acquisition costs are excluded expenditure under section 270BG. This includes the land purchase price, legal fees, stamp duty land tax in England and Northern Ireland, land and buildings transaction tax in Scotland, land transaction tax in Wales, and any other incidental costs attributable to the acquisition. Only construction costs may potentially qualify.

Capital Allowances Act 2001 section 270BG

Acquisition or alteration of land etc.

Section 270BG identifies the types of land-related expenditure that are excluded from qualifying for structures and buildings allowances.

Spending on acquiring land (including rights in or over land), together with associated fees, stamp duty land tax, land and buildings transaction tax, land transaction tax, and other incidental acquisition costs, is excluded expenditure
Spending on altering land — meaning land reclamation, land remediation, and landscaping (unless the landscaping creates a structure) — is also excluded, subject to an exception for site preparation under section 270BK
Spending on seeking planning permission, including fees and related costs, is excluded expenditure
For the purposes of these exclusions, "land" does not include buildings or structures, except when dealing with the specific definitions of land remediation and related contaminated or derelict land provisions

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