Property capital allowances calculator, 2026/27

How this is calculated

Fixtures and integral features such as electrical systems, heating, lifts and fitted kitchens in a commercial property usually qualify as plant and machinery. The Annual Investment Allowance gives a 100% deduction on the first £1,000,000 of such spend in a year, with anything above that going into the main pool for an 18.0% writing-down allowance.

The structure of the building itself, walls, floors, roof, does not qualify for plant and machinery allowances but can qualify for the structures and buildings allowance at 3.0% a year on a straight-line basis, provided the contract for construction or renovation was entered into after 28 October 2018 and the building is used for a qualifying commercial purpose.

The combined first-year saving in this calculator adds the AIA, the first year of main pool writing-down allowance, and the first year of structures and buildings allowance together, then applies the company's marginal corporation tax rate to show the cash tax saving.

Commercial versus residential property

These allowances are only available on commercial property, or the commercial part of a mixed-use building. Furnished residential lettings cannot claim plant and machinery allowances on fixtures inside individual dwellings, though the replacement of domestic items relief covers like-for-like replacements instead.

Furnished holiday lettings historically had access to capital allowances in a similar way to commercial property, but that separate tax status was withdrawn from April 2025, so allowances on holiday lets should be reviewed carefully against current rules.

Getting a proper allocation

On a property purchase, the price needs to be split between land, structure and qualifying fixtures, usually via a capital allowances survey or apportionment agreement with the seller under a section 198 election, otherwise fixtures allowances can be permanently lost.

For a new build or major renovation, keep a clear cost breakdown from the contractor from the outset so that the structures and buildings allowance and any plant and machinery elements can be identified without a costly retrospective survey.

Can a residential landlord claim these allowances?

No. Plant and machinery and structures and buildings allowances are for commercial property. Residential lettings cannot claim capital allowances on fixtures inside dwellings, though replacement of domestic items relief is available instead.

What is the structures and buildings allowance rate?

The rate is 3.0% a year on a straight-line basis, meaning it takes 33⅓ years to relieve the full qualifying cost, and only applies to construction contracts entered into from 29 October 2018 onwards.

Do I need a survey to claim fixtures allowances on a purchase?

Usually yes for anything beyond a straightforward new-build purchase. A capital allowances survey identifies and values qualifying fixtures, and a section 198 election with the seller is often needed to fix the amount that can be claimed.

Does the Annual Investment Allowance cover the building structure?

No, the AIA only applies to plant and machinery, such as fixtures and equipment. The building's structure is relieved separately, if at all, through the structures and buildings allowance.