Taxation of Chargeable Gains Act 1992 section 39A

Exclusion of certain expenditure: structures and buildings allowances

Section 39A prevents a double tax benefit by excluding certain expenditure from the capital gains computation where structures and buildings allowances have already been claimed by a lessee on that expenditure.

• Applies when a building or structure (or an interest in one) that has attracted structures and buildings allowances is disposed of to a connected person
• The person making the disposal must be, or have been, a lessor under a lease of the building or structure where the lease was granted for 35 years or more (as covered by section 270DD of CAA 2001)
• Any expenditure on which a lessee has claimed structures and buildings allowances is excluded from the allowable deductions under section 38 when computing the chargeable gain
• The effect is to prevent the same expenditure from reducing tax twice — once through capital allowances claimed by the lessee and again through the capital gains computation on disposal