Following the UK’s departure from the EU, the government intend to establish new Freeports as a means to boost trade, jobs and investment across areas of the UK.
What are Freeports?
Freeports operate as secure customs zones, they are usually located at ports or airports, where businesses can be carried out inside a country’s land border, but where different customs rules apply. They may also have other preferential tax reliefs and or allowances, to attract investment to boost the economy.
The Chancellor announced eight freeports in the budget.
- East Midlands Airport
- Felixstowe and Harwick
- The Humber region
- The Liverpool City region
Reliefs to be introduced:
Stamp Duty Land Tax (SDLT)
Relief will be introduced for purchases of land and buildings within a Freeport tax site, for a period of up to 3 years. To qualify the property acquired must be used in a qualifying manner.
Enhanced Structures and Buildings Allowances in Freeports
Businesses incurring expenditure on commercial property within Freeport tax sites from designation until 30 September 2026 can claim enhanced Structures and Building Allowances (SBA). This is available for construction of new, renovation of existing, commercial structures and buildings within Freeport tax sites.
The enhanced SBA will be on assets brought into use on or before 30 September 2026, the rate of relief is a 10% deduction on a straight-line basis.
Enhanced Capital Allowances for plant and machinery in Freeports
Enhanced capital allowances (ECA) will be available for 100% of the qualifying expenditure in the tax period it is incurred.