Capital Allowances Act 2001 section 363

Expenditure on the construction of a building

Section 363 clarifies what counts as construction expenditure for agricultural buildings allowances, specifically excluding land costs from qualifying expenditure.

• Expenditure on the construction of a building does not include the cost of acquiring land.
• It also excludes expenditure on acquiring rights in or over land.
• The principle is that allowances are only given for assets that depreciate — buildings depreciate, but land does not.
• This rule is consistent with the approach taken in other parts of the Capital Allowances Act.