Check if you can claim enhanced structures and buildings allowance relief in UK Freeport or Investment Zone special tax sites
Find out if you can claim enhanced structures and buildings allowance relief on qualifying expenditure on structures and buildings in a UK Freeport or Investment Zone special tax site.
Where we refer to a ‘Freeport’ on this page, this also applies to ‘Green Freeports in Scotland’ unless otherwise stated.
A special tax site is an area of land where businesses can claim certain tax reliefs. Special tax sites are sometimes known as Freeport tax sites or Investment Zone tax sites. A Freeport tax site is independent and separately authorised from a Freeport customs site, but they can cover the same area of land.
Find out more about Freeports.
Find out more about Investment Zones.
You can claim enhanced structures and buildings allowance relief when you incur qualifying expenditure on structures and buildings in a special tax site.
The relief can be claimed for expenditure incurred from the date a special tax site is designated until the special tax site’s end date.
You can find out which categories of expenditure are eligible for structures and building allowance. Read the guidance on claiming capital allowances for structures and buildings.
You cannot claim until the relevant Freeport or Investment Zone special tax site has been designated.
Check which sites are designated Freeport special tax sites.
Check which sites are designated Investment Zone special tax sites.
How to qualify
You must meet the requirements for claiming capital allowances on structures and buildings. You must also:
- begin construction on the building or structure when it’s in a special tax site (construction begins when you enter into the first contract or begin construction work, whichever is the earliest)
- bring the building or structure into qualifying use when it’s in a special tax site and on or before the special tax site’s end date
- incur the qualifying expenditure on the building or structure when it’s in a special tax site and on or before the special tax site’s end date
- be registered for either:
- Corporation Tax
- Income Tax
How to apportion the relief
You must apportion the relief between the:
- enhanced rate of structures and buildings allowance
- normal rate of structures and buildings allowance
This apportionment will take place when either:
- part of the building or structure is out of the special tax site
- you bring part of a structure or building into qualifying use after the special tax site’s end date
How much relief you can claim
You can claim 10% of the special tax site qualifying expenditure each year if you meet all the required conditions.
You can make a claim for the relief for 10 years from the allowance period start date.
The allowance period start date is the later of when the:
- building or structure is first used for a non-residential purpose
- qualifying expenditure is incurred
Examples of relief you can claim
Example 1
You built a warehouse costing £1,200,000 in a special tax site. All contracts for construction were entered into after the date the special tax site was designated.
The warehouse was completed on 22 March 2024 and you started to use it in your logistics business from 1 April 2024. You prepare accounts for each year ending on 31 March.
In the chargeable period to 31 March 2025, you can claim 10% for the year.
10% × £1,200,000 = £120,000
Total claim £120,000 for the year ended 31 March 2025.
Example 2
You built a factory costing £2,000,000 which was 60% in a special tax site and 40% in an area which is not a special tax site. All contracts for construction were entered into after the date the special tax site was designated.
The factory was completed on 13 July 2023 and you started to use it in your manufacturing business from 1 August 2023. You prepare accounts for each year ending on 31 July.
In the chargeable period to 31 July 2024, you can claim 10% a year on 60% of the expenditure and 3% a year on 40% of the expenditure.
60% of £2,000,000 = £1,200,000
40% of £2,000,000 = £800,000
10% of £1,200,000 = £120,000
Plus 3% of £800,000 = £24,000
Total claim £144,000 for the year ended 31 July 2024.
How to claim relief
You must have an allowance statement to claim the relief. It must state:
- that you want the qualifying expenditure to be special tax site qualifying expenditure
- the amount of special tax site qualifying expenditure
Read Claiming capital allowances for structures and buildings to find out more about allowance statements and how to claim relief.
Last updated 8 April 2024 + show all updates
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We now use the broad term 'special tax sites' instead of referring specifically to 'Freeport sites'. Links to guidance about Freeport special tax sites and Investment Zone special tax sites have been added.
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Welsh translation added.
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First published.