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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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IBA: relevant interest: acquired when construction is complete

Budget 2007 announced a business tax reform package including the gradual withdrawal of IBAs and ABAs over four years. Legislation was introduced in FA08 to give effect to those changes. The phased withdrawal of IBA writing down allowances had effect for chargeable periods ending on or after 1 April 2008 for businesses within the charge to CT and 6 April 2008 for businesses within the charge to IT. There are no IBA writing down allowances for the financial year beginning on 1 April 2011 and subsequent years.


If a person who incurs expenditure on the construction of a building has an agreement that he will be granted an interest in the building once construction is complete, the interest, which is granted after construction is complete, is the relevant interest.

Example Browne, who has no other interest in the land concerned, builds a warehouse under an agreement for a lease of that warehouse when construction is complete. The relevant interest in the warehouse is the lease that is granted after construction is complete.