Taxes Consolidation Act 1997 section 372D

Capital allowances in relation to construction or refurbishment of certain commercial premises

Section 372D provides capital allowances for capital expenditure incurred on the construction or refurbishment of certain commercial premises located in qualifying urban renewal areas or fronting on to qualifying streets.

• Relief is given by treating qualifying commercial premises as if they were industrial buildings under the Tax Acts, with allowances available only where the construction or refurbishment work is carried out during the qualifying period.
• Owner-occupiers and lessors may claim a 50 per cent initial allowance plus annual writing-down allowances of 4 per cent; alternatively, owner-occupiers may claim free depreciation of up to 50 per cent in lieu of the initial allowance.
• Refurbishment expenditure qualifies only where it is at least 10 per cent of the market value of the premises immediately before the refurbishment work began.
• No balancing charge arises on a disposal or other relevant event occurring more than 13 years after the premises was first used (or, for refurbishment, more than 13 years after the refurbishment expenditure was incurred).