Chapter CA45300
| Published date | 16 April 2016 |
| Record Number | CA45300 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
Meaning of qualifying expenditure
Qualifying expenditure is capital expenditure on
- converting a qualifying building into qualifying business premises,
- the renovation of a qualifying building that is, or is to be, qualifying business premises, and
- repairs to a qualifying building.
This is not qualifying expenditure. Expenditure on
- acquiring land,
- extending a qualifying building, or
- developing land next to a qualifying building.
For example, adding another storey to a qualifying building or creating a basement fora qualifying building is not qualifying expenditure.
Example Jasper buys a warehouse situated in a disadvantaged area that hasbeen unused for 3 years and converts it into a hotel. Jasper’s expenditure onconverting the warehouse into a hotel, but not on buying the warehouse and the land thatit stands on, is qualifying expenditure. If Jasper creates a basement for the hotelbecause he needs more storage space the expenditure on creating the basement is notqualifying expenditure.
Meaning of qualifying building
A qualifying building is an unused commercial building or structure orpart of an unused commercial building or structure. The building must have been unused fora year immediately before the conversion or renovation began. This means that it must nothave been used for anything for a year before conversion begins. The last use must nothave been as a dwelling.
Example As in the previous example Jasper buys a warehouse situated in adisadvantaged area that has been unused for 3 years and converts it into a hotel. Thewarehouse is a qualifying building and so Jasper’s conversion expenditure isqualifying expenditure and qualifies for BPRA.
If a qualifying building is situated partly in a disadvantaged area and partly outside itmake a just and reasonable apportionment of the qualifying expenditure to find the partattributable to the part in the disadvantaged are. Only that part of the expenditurequalifies for BPRA. For example, if a qualifying building is situated on the boundary of adisadvantaged area so that one third is in the area and two thirds is outside it only onethird of the qualifying expenditure qualifies for BPRA.
Meaning of qualifying business premises
A building or part of a building is qualifying business premises if it isa qualifying building that is used, or available and suitable for letting for use, as acommercial building other than a dwelling. A commercial building is abuilding in use for the purposes...
To continue reading
Request your trial