Structures and Buildings Allowance: Where SBA Fits Against the Capital Allowances Pools

SBA is the slow relief on everything the pools cannot reach

The Structures and Buildings Allowance exists to give some relief on the part of a commercial property that the plant-and-machinery rules deliberately exclude: the shell, the frame, the floors, the walls and the roof. Those elements are carved out of plant by CAA 2001 s.21 List A and s.22 List B, and before SBA they attracted no allowances at all. SBA fills that gap at a flat 3% of the original qualifying cost each year, straight-line, for 33⅓ years.

That rate is the whole story of this page. SBA is the consolation prize on the structure, and it sits a long way behind the plant pools. For a commercial buyer, occupier or developer the useful question is never "do I claim SBA", the answer to that is yes if an allowance statement exists. The useful question is how much of your spend you can correctly move off the 3% structure bucket and into the faster pools, because that is where the money is. This page takes that allocation view. It does not re-derive the Finance Act 2018 mechanics, the construction-start gate or the s.270CF residential exclusion, which are all set out in full on our SBA 3% claim mechanics guide.

The three buckets on a commercial build or purchase

Every pound of qualifying capital spend on a commercial property lands in one of three buckets, and each writes off at a very different speed for 2026/27:

• Main-rate pool, 14% reducing-balance. Loose and movable plant. The rate dropped from 18% to 14% from April 2026, so this pool is slower than it used to be, but it is still far ahead of the structure. New and unused main-rate plant can go faster still: a company can fully expense it at 100% in year one, and from 1 January 2026 a 40% first-year allowance is available on new main-rate plant to unincorporated businesses too.
• Special-rate pool, 6% reducing-balance. Integral features, the electrical, cold and hot water, heating, air-conditioning and lift systems built into the fabric. A company can claim a 50% first-year allowance on new special-rate spend, with the balance then running at 6%.
• SBA, 3% straight-line. The structural shell and general building work that neither pool can take. No first-year relief, no acceleration, just 3% a year for 33⅓ years.

Annual Investment Allowance still sits over the top of both pools at £1m a year, giving 100% relief on the first £1m of qualifying plant and integral-features spend, which is the route unincorporated businesses use where full expensing is not open to them. None of these fast reliefs touch the structure. That is the point: the more you leave in SBA, the slower your relief.

Worked example: the £2,000,000 new building

Take a company building a new commercial unit for £2,000,000 of qualifying construction cost. Suppose a specialist survey identifies £600,000 of integral features and plant inside that figure, leaving £1,400,000 of genuine structure.

The structural £1,400,000 goes into SBA at 3%, which is £42,000 of relief a year for 33⅓ years. The £600,000 of plant and integral features is where the acceleration happens. The main-rate plant within it can be fully expensed at 100% by the company in year one, and the special-rate element attracts the 50% first-year allowance with the balance at 6%. Instead of trickling out at 3%, a large slice of that £600,000 clears in the first year.

Now flip the split. If a lazy allocation had dumped the whole £2,000,000 into SBA as "the building", every pound would write off at 3%, £60,000 a year, and it would take until year 34 to see it all. The £600,000 correctly identified as plant is the same money, taxed decades sooner. On a discounted-cash-flow basis the correct split is worth six figures in present value on this single building, before you even reach the AIA and full-expensing timing benefit.

Why moving spend into the pools accelerates relief so much

The reason the split is worth so much is compounding and timing. A 3% straight-line allowance hands you the same small amount every year for a third of a century, so the relief you get in year 33 is worth very little once discounted back. A 100% first-year deduction, or even a 14% reducing-balance pool, front-loads the relief into the years closest to the spend, when it is worth most and when the business most often needs the cash-tax saving.

Two identical buildings with identical total spend can therefore produce very different tax outcomes purely because one had a proper plant-and-machinery analysis and the other did not. This is not aggressive planning. It is claiming, on the correct side of the boundary, relief that statute already grants. The capital allowances calculator gives an indicative split by building type before a survey confirms the real figure.

What genuinely belongs in SBA, and what does not

SBA qualifying expenditure is the cost of constructing, and in some cases renovating, the building or structure itself. What it does not include is the operationally important part:

• Land, acquisition and planning costs are excluded. The cost of buying the site, the legal and incidental costs of acquisition, SDLT and planning-permission costs all fall outside SBA. On a purchase where the price splits between land and building, only the building element can carry SBA.
• Integral features are not SBA, they are the 6% pool. This is the most common misallocation. Air conditioning, wiring, plumbing and lifts feel like "the building" but statute puts them in the special-rate pool, which is twice the SBA rate and eligible for the 50% first-year allowance. Leaving them in SBA halves their relief speed at best.
• Loose plant is the main pool. Anything that is genuinely apparatus used in the trade rather than the setting for it belongs in the main pool, with its access to full expensing, the 40% FYA and AIA.

The precise boundary between structure, integral features and plant is fixed by CAA 2001 and a run of case law, and we do not restate it here. Where an element sits, and the s.270BI rule that stops the same spend being claimed twice, is covered in the mechanics guide. For the due-diligence view on a second-hand purchase, where the unclaimed plant is often hiding, see embedded capital allowances on commercial property.

The allowance statement: no statement, no claim

SBA carries one procedural trap that has no equivalent in the plant pools. Without a written allowance statement in existence before the first claim, the qualifying expenditure is treated as nil. The statement has to identify the building, give the date of the earliest construction contract, state the qualifying expenditure, and state when the building was first brought into non-residential use.

On a development you create the statement from your own construction records. On a purchase you have to obtain it from the seller, which is why it belongs on the heads-of-terms checklist rather than being discovered after completion. If no statement exists and cannot be reconstructed from a prior owner, the SBA on that interest is permanently lost even though the structural spend was real. The detail of the statement requirement lives on the mechanics page; the practical point for a buyer is simply to ask for it early.

Buying a building with existing SBA, and disposals

SBA is designed to pass with the building. When you buy a commercial property that is part-way through its 33⅓ year allowance period, you inherit the remaining SBA and continue the same 3% straight-line claim on the original base, provided you hold the allowance statement. There is no reset and no revaluation of the SBA base to your purchase price.

On the way out, SBA behaves very differently from the plant pools. There is no balancing allowance and no balancing charge. Instead, the cumulative SBA you claimed is added to your disposal proceeds when you compute the chargeable gain, so the relief is recouped through CGT or corporation tax on the larger gain. In present-value terms SBA is still worth having, because a deduction now against a recoupment decades later, at a rate that may be lower, is a timing benefit. But it is a timing shift, not a permanent giveaway, which is another reason to prioritise the pools where the relief is genuinely accelerated and the disposal mechanics are handled inside the pool itself.

SBA alongside land remediation relief on brownfield

On a brownfield development the allocation exercise has a third destination. Before any structure goes up, a company cleaning contaminated or long-derelict land can claim land remediation relief, a 150% corporation-tax deduction on qualifying remediation cost. That relief runs on entirely different expenditure from SBA and the two can both be claimed on the same scheme.

So a brownfield build has remediation spend heading to LRR, plant and integral features heading to the pools, and the structural balance heading to SBA at 3%. Getting all three right on one project is exactly the kind of split where a specialist earns their keep. The 150% relief and its polluter-pays and corporate-only conditions are covered in the land remediation relief guide.

Getting the allocation right, and who to ask

SBA is worth claiming, but it should be the last bucket you fill. The value on any commercial build, fit-out or purchase is in maximising the defensible plant and integral-features claim first, using full expensing, the 40% FYA and AIA where they apply, and letting SBA take the structural balance at 3% afterwards. That split is a valuation and construction-cost exercise, and the boundary is set by statute rather than by preference, so an over-aggressive reclassification of structure as plant is a real enquiry risk that a proper survey avoids.

This is specialist territory. The right adviser is a capital-allowances specialist, usually surveyor-led, not a general accountant, because pricing each element of a building and evidencing why it qualifies where it does is what supports the claim if HMRC asks. The review is normally free and fee-contingent, so there is no cost to finding out what a correct allocation is worth on your property. Use the form below to request one, and you can sanity-check the likely split first with the capital allowances calculator.

Sources and further reading: CAA 2001 Part 2A (SBA), the HMRC Capital Allowances Manual CA90000 series on SBA, the gov.uk structures and buildings allowance guidance, and, on the plant side, CAA 2001 s.104A for the special-rate pool.