Section 279 Purchases of certain buildings or structures
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The 'Net Price Paid' Formula and Separate Site Sales and Building Agreements: Tax Briefing Issue 66 - 2007
(1) For the purposes of this section-
...1
"the net price paid" means the amount represented by A in the equation-
A = B x __C__
C + D
where-
B is the amount paid by a person on the purchase of the relevant interest in a building or structure,
C is the amount of the expenditure actually incurred on the construction of the building or structure, and
D is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 270(2).
Amendments
1 Deleted by Finance Act 1998 section 136(1) and Schedule 9 para 5 with effect from 6 April 1997.
(2) Where expenditure is incurred on the construction of a building or structure and, before the building or structure is used or within a period of [2 years]1 after it commences to be used, the relevant interest in the building or structure is sold, then, if an allowance has not been claimed by any other person in respect of that building or structure under this Chapter-
(a) the expenditure actually incurred on the construction of the building or structure shall be disregarded for the purposes of sections 271, 272, 274 and 277, but
(b) the person who buys that interest shall be deemed for those purposes to have incurred, on the date when the purchase price becomes payable, expenditure on the construction of the building or structure equal to that expenditure or to the net price paid by such person for that interest, whichever is the less;
but, where the relevant interest in the building or structure is sold more than once before the building or structure is used or within the period of [2 years]1 after it commences to be used, paragraph (b) shall apply only in relation to the last of those sales.
Amendments
1 Substituted by Finance (No. 2) Act 2008 section 19(a) as respects a sale of the relevant interest in a building or structure which occurs on or after 14 October 2008.
How is the construction expenditure calculated for an industrial building for allowances if purchased from a non-builder?
(2) This subsection deals with a purchase you make from a non-builder. Except where the construction was carried out by a builder in the course of a building trade (see (3)), you are deemed to have incurred construction expenditure equal to the lower...
(3) Where the expenditure incurred on the construction of a building or structure was incurred by a person carrying on a trade which consists, as to the whole or any part of the trade, of the construction of buildings or structures with a view to their sale and, before the building or structure is used or within a period of [2 years]1 after it commences to be used, such person sells the relevant interest in the building or structure in the course of that trade or, as the case may be, of that part of that trade, subsection (2) shall apply subject to the following modifications-
(a) if that sale is the only sale of the relevant interest before the building or structure is used or within the period of [2 years]1 after it commences to be used, subsection (2) shall apply as if in paragraph (b) of that subsection "that expenditure or to" and ", whichever is the less" were deleted, and
(b) if there is more than one sale of the relevant interest before the building or structure is used or within the period of [2 years]1 after it commences to be used, subsection (2) shall apply as if the reference to the expenditure actually incurred on the construction of the building or structure were a reference to the price paid on that sale.
Amendments
1 Substituted by Finance (No. 2) Act 2008 section 19(b) as respects a sale of the relevant interest in a building or structure which occurs on or after 14 October 2008.
How do I calculate construction expenditure for an industrial building allowance if I buy it from a builder?
(3) This subsection deals with a purchase you make from a builder. A different rule applies where the construction expenditure incurred on the building bought used (or within 12 months after its first use) was incurred by a builder in the course of a...
