F1Part 3ABusiness Premises Renovation Allowances
Chapter 2QUALIFYING EXPENDITURE
360BMeaning of “qualifying expenditure”
F51
In this Part “qualifying expenditure” means capital expenditure incurred before the expiry date—
a
in respect of which Conditions A and B are met, and
b
which is not excluded by subsection (3), (3B) or (3D).
2
In subsection (1) “ the expiry date ” means—
a
the fifth anniversary of the day appointed under section 92 of F2FA 2005, or
b
such later date as the Treasury may prescribe by regulations.
F32A
Condition A is that the expenditure is incurred on—
a
the conversion of a qualifying building into qualifying business premises,
b
the renovation of a qualifying building if it is or will be qualifying business premises, or
c
repairs to a qualifying building or, where the building is part of a building, to the building of which the qualifying building forms part, to the extent that the repairs are incidental to expenditure within paragraph (a) or (b).
2B
Condition B is that the expenditure is incurred on—
a
building works,
b
architectural or design services,
c
surveying or engineering services,
d
planning applications, or
e
statutory fees or statutory permissions.
2C
But Condition B is treated as met in respect of expenditure incurred on matters not mentioned in that Condition to the extent that that expenditure (in total) does not exceed 5% of the qualifying expenditure incurred on the matters mentioned in subsection (2B)(a) to (c).
3
Expenditure is F6excluded if it is incurred on or in connection with—
a
the acquisition of land or rights in or over land,
b
the extension of a qualifying building (except to the extent required for the purpose of providing a means of getting to or from qualifying business premises),
c
the development of land adjoining or adjacent to a qualifying building, or
d
the provision of plant and machinery, other than plant or machinery which is or becomes a fixture F7(as defined by section 173(1)) and falls within subsection (3A).
F43A
The fixtures which fall within this subsection are—
a
integral features within the meaning of section 33A (taking account of section 33A(6) and any provision for the time being made under section 33A(7)) or part of such a feature;
b
automatic control systems for opening and closing doors, windows and vents;
c
window cleaning installations;
d
fitted cupboards and blinds;
e
protective installations such as lightning protection, sprinkler and other equipment for containing or fighting fires, fire alarm systems and fire escapes;
f
building management systems;
g
cabling in connection with telephone, audio-visual data installations and computer networking facilities, which are incidental to the occupation of the building;
h
sanitary appliances, and bathroom fittings which are hand driers, counters, partitions, mirrors or shower facilities;
i
kitchen and catering facilities for producing and storing food and drink for the occupants of the building;
j
signs;
k
public address systems;
l
intruder alarm systems.
3B
Expenditure is excluded if, and to the extent that, it exceeds the market value amount for the works, services or other matters to which it relates.
3C
“The market value amount” means the amount of expenditure which it would have been normal and reasonable to incur on the works, services or other matters—
a
in the market conditions prevailing when the expenditure was incurred, and
b
assuming the transaction as a result of which the expenditure was incurred was between persons dealing with each other at arm's length in the open market.
3D
Expenditure is excluded if the qualifying building was used at any time during the period of 12 months ending with the day on which the expenditure is incurred.
4
For the purposes of this section, expenditure incurred on repairs to a building is to be treated as capital expenditure if it is not expenditure that would be allowed to be deducted in calculating the profits of a property business, or of a trade, profession or vocation, for tax purposes.
5
The Treasury may by regulations F8—
a
amend this section so as to add a description of fixture to the list in subsection (3A), or vary or remove a description of fixture in that list;
b
make further provision as to expenditure which is, or is not, qualifying expenditure.
Pt. 3A inserted (11.4.2007 with effect in accordance with s. 92 of the amending Act) by Finance Act 2005 (c. 7), Sch. 6 para. 1; S.I. 2007/949, art. 2