CA93600 | Structures and buildings allowance (SBA): qualifying expenditure: qualifying capital expenditure: meaning of developer

CAA01/S270BF

Property developer

When determining qualifying capital expenditure on the sale of the relevant interest by a property developer (CA93650, CA93700), a developer is defined as a person who carries on a trade that consists, in whole or in part, of the construction of buildings with a view to their sale.

The fact that a person subcontracts the actual construction work, and/or elements of the sale/transfer process does not prevent them from being a developer.

Expenditure by a developer

Expenditure on a building constructed by a developer will usually be revenue and not capital expenditure, because the buildings are to be sold by the developer in the course of its trade. There are therefore rules for determining ‘qualifying capital expenditure’ that are specific to developers who are building and selling buildings in the course of their development trade.

To qualify for SBA all the contracts for construction of the building must have been entered into by the developer on or after 29 October 2018 CA90200.