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HMRC internal manual

Oil Taxation Manual

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HM Revenue & Customs
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Capital Allowances: Industrial Buildings or Structures - Buildings constructed for occupation by or for welfare of employees

CAA01\S277(1) excludes certain buildings such as dwelling houses from IBA. However where a building is constructed for occupation by or for welfare of persons employed in working a source of mineral deposits (CAA01\S277(2)), then the building will qualify for IBA provided it

  1. is likely to be of little or no value to the person carrying on the trade when the land or source is no longer worked, or
  2. will cease to be owned by that person on the ending of a foreign concession under which the land or source is worked (CAA01\S277(3)).

It will be rare for the “value” condition to be satisfied but the termination of a Profit Sharing Contract might trigger the second condition (see OT26680).

Carry-back of balancing allowances

Where a balancing allowance falls to be made for the last chargeable period in which a trade of working a source of mineral deposits is carried on and the allowance is made for expenditure on a building which was constructed for occupation by or for welfare of persons employed in that trade there is provision for the balancing allowance to be carried back. See the Capital Allowances Manual and CAA01\S355 for further details.