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HMRC internal manual

Capital Allowances Manual

IBA: how allowances and charges are made: buildings temporarily out of use

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.

CAA01/S354

A person can claim IBA on an industrial building which is temporarily disused CA32800. If the last time the building was used it was used for a trade that has permanently ceased or it was let treat the person as carrying on a property business. You should then treat allowances as expenses and charges as receipts of that property business.

There is an additional rule where the last use of the building was for a trade that has permanently ceased. Treat charges as receipts of that trade purely in order to allow any deductions against them which you would allow against a post cessation receipt.