The government is consulting on a new capital allowance to encourage businesses to build and invest in the UK.
The Structures and Buildings Allowance, first announced in last year's Budget, will provide a 2 per cent annual tax relief for new commercial structures and buildings, including conversions and renovations.
The relief will be available for UK and overseas structures and buildings, as long as the business pays tax in the UK, but it will be limited to the cost of physically constructing the building.
It will be handed out over a 50-year period but will not apply where any part of the property is used for residential purposes.
Following initial consultation with businesses the government today (March 13) confirmed the relief will continue to be available even if the structure or building is not in use.
At point of demolition a capital gains charge will fall due, but any expenditure on which tax relief was not claimed will be eligible for write off.
The relief will then be passed on to the purchaser who will be able to write it down over the remaining part of the 50-year period.
If the property or construction is leased to someone else, tax relief can be claimed by the lessor as long as the lease is for no more than 35 years.
The government released draft legislation for the allowance alongside today's Spring Statement and is inviting businesses to feed back their thoughts before April 24.
It anticipates a debate of the final version of the legislation will be held in Parliament ahead of the summer recess.
carmen.reichman@ft.com
