Capital Allowances Act 2001 section 538A

Buildings and structures

Section 538A sets out how contribution allowances work in the context of structures and buildings allowances (SBAs) under Part 2A, enabling a contributor to claim SBAs on capital contributions made towards the construction or acquisition of buildings and structures.

• Where a person (C) makes a capital contribution towards qualifying expenditure on a building or structure, C is treated as if the contribution were their own expenditure on constructing or acquiring that building or structure, allowing C to claim structures and buildings allowances.
• The section applies where the general conditions for contribution allowances are met, the contribution relates to Part 2A qualifying expenditure, and the contribution is made for the purposes of a qualifying activity — carried on by C or C's tenant if the recipient is a public body, or only by C's tenant if the recipient is not a public body.
• Qualifying use of the building or structure is treated as beginning on the day the recipient first brought it into qualifying use, or, where the recipient is a public body, the earlier of that day and the day of first non-residential use; the date of qualifying expenditure is treated as the date of the contribution.
• If C did not hold a relevant interest in the building or structure during the period from making the contribution to its first non-residential use by the recipient, C is deemed to have held a relevant interest from the start of that period and does not lose it on any subsequent sale of the recipient's interest.