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ACCA Applied Skills · Taxation (UK) · Property and investment income

Priya owns a freehold commercial building that she lets to a tenant. She constructed it for £400,000 (excluding land), and it was brought into qualifying use on 1 July 2025. Using the straight-line rate in the tax tables, what structures and buildings allowance (SBA) can Priya claim for the tax year 2025/26 if she claims the maximum? (Assume the allowance is time-apportioned from the date of first use, and that the tax year runs from 6 April 2025 to 5 April 2026.)

The allowance is £9,000. Structures and buildings allowance is 3% straight-line on £400,000, giving £12,000 a year, but the building was only in qualifying use for nine months of 2025/26, so the claim is time-apportioned to £9,000.

  1. A£9,000Correct
  2. B£12,000
  3. C£8,000
  4. D£10,000

Explanation

SBA is a 3% straight-line allowance on qualifying cost: 3% x £400,000 = £12,000 for a full year. From 1 July 2025 to 5 April 2026 is 9 months, so £12,000 x 9/12 = £9,000. The £12,000 option ignores time apportionment.

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