BIM52501 - Cemeteries: deductions for capital expenditure

The statute - ICTA88/S91

In computing the profits of any period, you should allow a deduction under ICTA88/S91, for capital expenditure on providing land, the right of interment in which is sold in that period. You should also allow a deduction of part of the cost of buildings and structures (for example chapels, boundary walls, carriage-ways, etc., but excluding dwelling houses) and of providing the sites of such buildings and structures and other land in the cemetery unsuitable for graves (for example, land used for paths, flower beds and shrubbery). You compute the deduction by applying the fraction

grave spaces sold in the period divided by
graves spaces sold in the period + grave spaces available for sale at the end of the period

to the residue of expenditure at the end of the period.

The residue of expenditure at that date is the amount of the qualifying expenditure reduced by,

• the allowances given for earlier periods, and
• the net sale proceeds or compensation received for any asset sold or destroyed since the commencement of the first period concerned, usually the basis period for 1954-55.

QUALIFYING EXPENDITURE

You should exclude expenditure on buildings destroyed before the commencement of the first period concerned. The amount of other capital expenditure, incurred before that date, which qualifies for relief is given by the fraction

grave spaces available for sale at that date divided by
graves spaces available for sale at that date + grave spaces already sold.

Buildings and land not suitable for grave spaces qualify for relief only if they are likely to have little or no value when the cemetery is full. Thus a chapel or a carriage way used both for the cemetery and for an adjoining crematorium would not ordinarily qualify.