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HMRC internal manual

Business Income Manual

Cemeteries and crematoria: costs of the building

S172ZE Income Tax (Trading and Other Income) 2005, S149E Corporation Tax Act 2009

The ‘costs of the building’ are relevant for computing the trading deductions for crematoria in relation to the expenditure of memorials, inscriptions and niches. A partial trading deduction is available in relation to these costs. The calculation of the partial deduction is discussed in BIM52520 and BIM52525. This page covers the definition of the ‘costs of the building’.

In order to be a ‘cost of the building’, the cost must be incurred by the trader (or a predecessor trader). However, the definition differs depending on whether the building was acquired or constructed.


If the building was acquired for the purposes of the trade, the costs are the lower of:

  • the market value of the building when it was acquired
  • the costs incurred in acquiring the building


If the building was constructed for the purposes of the trade, the costs are the costs incurred in constructing the building.

Other costs of the building

If further capital constructions costs (such as renovations or extensions) are incurred after the building was acquired or constructed, these costs are also costs of the building.

Excluded costs

The following costs should not be included as ‘costs of the building’:

  • costs of maintaining the building
  • the cost of the land on which the building is situated (to apportion costs between the land and the building, a just and reasonable basis is acceptable)