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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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MEA: Qualifying expenditure: Valuation: buildings on land in the UK

Where there are buildings situated on the land the undeveloped market value reported by the District Valuer, which is to be excluded from qualifying expenditure, will reflect the value of the buildings.

Where, either at the time of acquisition of the interest in the land or later, the buildings cease permanently to be used for any purpose their ‘unrelieved value’ is treated as qualifying expenditure. This is treated as incurred at the time when there is permanent cessation of use, not before.

The ‘unrelieved value’ is the value of the buildings determined as at the date of acquisition of the interest in the land (and ignoring any value attributable to the land on which they stand) less the net amount of capital allowances received by the person incurring the expenditure under CAA01/S405 (3).

Where the inspector is satisfied that the buildings have permanently ceased to be used for any purpose, ask the taxpayer for a valuation of them, excluding site value, as at the date of acquisition of the interest in the land.

Refer the case to the District Valuer on form 453. The valuation that will be provided by him will be of the undeveloped market value of the land excluding the buildings that have fallen out of use. Where there has been an earlier valuation of undeveloped market value in which the buildings were included the additional qualifying expenditure will be the difference between:

  • that earlier valuation,



  • the valuation (at the date the land in question was originally acquired) made subsequently when the buildings cease permanently to be used and given the undeveloped market value excluding the buildings in question.