Capital Allowances Act 2001 section 360Z

Giving effect to allowances and charges: trades

Section 360Z explains how allowances and charges arising under the structures and buildings allowance rules are treated when calculating the taxable profits of a trade, profession, or vocation, including special rules for Northern Ireland rate activities.

• Allowances are treated as a deductible expense of the trade, and charges are treated as a taxable receipt of the trade
• Where a qualifying building is occupied for a profession or vocation rather than a trade, the same treatment applies but by reference to that profession or vocation
• Where a company or partnership is treated as carrying on two separate trades (one being a Northern Ireland rate activity and the other a main rate activity), allowances and charges are allocated according to the purpose for which the qualifying building is used
• If a qualifying building is used for both Northern Ireland rate and main rate activities, allowances and charges must be apportioned between the two on a just and reasonable basis reflecting the proportion of use for each activity