| Overview |
BrightTax now supports the Structures and Buildings Allowance (SBA) pool in Individual Tax Returns. SBA is a capital allowance for expenditure on the construction, renovation, or conversion of commercial buildings and structures used in a trade. Sole traders and partners can claim SBA on qualifying expenditure through the capital allowances section of the Self-Employment schedule (SA103).
| What Is SBA? |
The Structures and Buildings Allowance (SBA) was introduced in October 2018. It allows businesses to claim a flat-rate annual allowance on qualifying expenditure on commercial structures and buildings:
| SBA Rate and Rules | |
| Annual rate | 3% per year (flat rate — no balancing allowances or charges) |
| Qualifying expenditure | New construction, renovation, or conversion of commercial buildings and structures |
| Excluded expenditure | Residential property, land, plant and machinery (use other CA pools) |
| Clawback | SBA claimed reduces the cost base of the asset — no balancing allowance on disposal |
| Start date | Available for expenditure incurred on or after 29 October 2018 |
| How to Claim SBA in BrightTax ITR |
- Open the Individual Tax Return in BrightTax and switch to Edit mode.
- Navigate to the Self-Employment (SA103) section.
- Open the Capital Allowances section within SA103.
- Select the SBA pool from the list of available capital allowance types.
- Enter the qualifying expenditure — the original cost of construction, renovation, or conversion.
- Enter the date the building was first brought into use for the business.
- BrightTax will calculate the annual SBA at 3% and apply it to the capital allowances computation automatically.
- If the accounting period is shorter or longer than 12 months, BrightTax time-apportions the allowance automatically.
- Save and run Check and Calculate to confirm the SBA is reflected in the tax computation.
| ✔ Tip: SBA is claimed on the original cost of construction — not the current market value or the price paid if the building was purchased second-hand. If the building was purchased from a previous owner who had claimed SBA, the allowance passes to the new owner on the remaining balance. |
| SBA and Disposal |
Unlike most capital allowances, SBA does not give rise to a balancing allowance or balancing charge on disposal. Instead, the amount of SBA claimed over the ownership period reduces the cost base of the building for capital gains purposes. Ensure this is reflected correctly in any capital gains calculation when the property is sold.
| Frequently Asked Questions |
Q: Can I claim SBA on a residential property used partly for business?
A: No. SBA applies to commercial structures and buildings only. Residential property does not qualify, even if it is partly used for business.
Q: I purchased a commercial building from a previous owner — can I claim SBA?
A: Yes, if the previous owner was entitled to claim SBA (i.e. they incurred qualifying construction or renovation expenditure on or after 29 October 2018). The allowance passes to you on the remaining unclaimed balance. You will need a written statement from the vendor confirming the original cost and SBA previously claimed.
Q: Does SBA interact with the Annual Investment Allowance (AIA)?
A: No. Structures and buildings are excluded from AIA. You cannot claim AIA on the same expenditure as SBA.
Comments
0 comments
Article is closed for comments.