Capital Allowances Act 2001 section 493

Expenditure on the construction of a building

Section 493 clarifies what counts as construction expenditure for the purposes of research and development allowances, excluding land costs and explaining how capital repairs are treated.

• Expenditure on constructing a building does not include the cost of acquiring land or any rights in or over land
• Land acquisition costs must be separated from building construction costs when claiming allowances
• Capital expenditure on repairing part of a building is treated as if it were expenditure on constructing that part for the first time
• This treatment of capital repairs means they can qualify for allowances on the same basis as original construction work