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Industrial Building Allowance - Qualifying Person
Put it in simple
words, the person
incurring the expenditure can get the initial allowance. Thereafter, the
person entitled to “the relevant interest” in relation to the expenditure
can get the annual allowance, and balancing allowance or balancing charge
on sale or demolition of the building.
“Relevant interest” is defined as
the interest in the building which the person who incurred the expenditure
was entitled to when he incurred it. Thus, if the person originally
incurring the expenditure was the Government lessee, any subsequent owner
who is the Government lessee has the relevant interest; or if the original
expenditure was by a person occupying the building under a lease, anyone
subsequently occupying the building under the remainder of that lease has
the relevant interest.
It is not necessary for the building to be used by
the landlord for a qualifying trade. If a building is leased and used by the
occupant for a qualifying purpose, the landlord, being the person having the
relevant interest in the capital expenditure incurred on construction, is
entitled to the allowances.
A lessee who merely pays rent for the lease of an
industrial building cannot get the allowances. But a tenant who incurs
expenditure on a building and uses it for a qualifying trade can get the
allowances.
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It is possible for two separate
persons to be given an allowance in respect of the same building, for
example the owner who bore the cost of the construction and subsequent
holders of his relevant interest may get an allowance based on the
original cost of construction; the lessee who incurred capital expenditure
on constructing alterations and improvements can also get an allowance on
such expenditure and so may any subsequent holders of his relevant
interest. |
Initial and annual allowances
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