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HMRC internal manual

Capital Allowances Manual

IBA: Qualifying expenditure: Abortive expenditure

Someone may run up costs on items such as architect’s fees but then decide not to build the building that the architect has designed. That kind of expenditure is not expenditure on the construction of a building because no building is constructed and so it does not qualify for IBA.

Initial allowances (but not WDA which depends on use) may be given on a building while it is being built. If a building is abandoned when it is partly built and it becomes clear that the building will never be completed you should withdraw any initial allowances that have been given. They have been given because qualifying expenditure has been incurred on the construction of a building that is to be an industrial building. Once it becomes clear that there never will be an industrial building that condition is no longer satisfied.