CA35400 - IBA: Balancing adjustments: Demolition costs

CAA01/S340

This is how you treat demolition costs when a building is demolished and the costs are borne by the person on whom the balancing adjustment will be made. The net demolition cost, that is the demolition costs less anything received for the remains of the building, are added to the residue of qualifying expenditure immediately before the demolition. This means that they are taken into account in calculating the balancing adjustment and so relief is given for them.

Where relief is given this way for demolition costs, they cannot be treated as expenditure on a property that replaces the demolished property.