What is the basic time limit for qualifying enterprise zone expenditure under section 298 of the Capital Allowances Act 2001?

Under section 298, construction expenditure on a building in an enterprise zone must generally be incurred within 10 years of the date the site was first included in the zone. This 10-year window is the basic deadline for expenditure to qualify as enterprise zone expenditure under United Kingdom law.

How can the 10-year time limit be extended to 20 years under section 298?

If a binding construction contract is entered into within the initial 10-year period, expenditure under that contract can still qualify even if incurred after the 10-year point, provided it falls within 20 years of the site first being included in the enterprise zone. This extension recognises that large projects may take considerable time to complete.

What does the term 'EZ building' mean in the Capital Allowances Act 2001?

An 'EZ building' is a shorthand term introduced by section 298 meaning a building on a site in an enterprise zone. This abbreviated term is used throughout sections 299 to 304 of the Capital Allowances Act 2001, which set out rules for identifying qualifying enterprise zone expenditure under United Kingdom law.

Who has the authority to designate an enterprise zone under United Kingdom law?

An enterprise zone is designated by formal order under the relevant legislation. In England, the Secretary of State makes the designation; in Scotland, the Scottish Ministers; and in Wales, the National Assembly for Wales. In Northern Ireland, the Department of the Environment designates enterprise zones under the Enterprise Zones (Northern Ireland) Order 1981.

Capital Allowances Act 2001 section 298

The time limit for qualifying enterprise zone expenditure

Section 298 sets the time limits within which construction expenditure on a building in an enterprise zone must be incurred in order to qualify as enterprise zone expenditure, and defines key terms used in the related sections.

Construction expenditure on a building in an enterprise zone must generally be incurred within 10 years of the site first being included in the zone.
If a construction contract is entered into within those 10 years, the time limit is extended to 20 years from the date the site was first included in the zone.
An "EZ building" means a building on a site in an enterprise zone — a shorthand used throughout the related sections.
An "enterprise zone" is an area formally designated as such by the Secretary of State, the Scottish Ministers, the National Assembly for Wales, or (in Northern Ireland) the Department of the Environment.

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