Compensation: land and buildings: demolition costs
Where demolition costs are allowable deductions, see CG15200, they are deductible in arriving at the gain or loss arising on the deemed disposal of the bare site.
Where any allowable expenditure on the building or structure has been fully covered by capital allowances, no loss relief is available, TCGA92/S41 (2), see CG15400+. In these circumstances, it is not necessary to compute the loss on the destruction etc. of the building or structure.
Where the site has increased in value to such an extent that any gain on its deemed disposal, see CG15770, would exceed any loss on the deemed disposal of the building or structure, then it will not be in the owner’s interest to treat them as separate assets. In such circumstances, TCGA92/S24 (3) need not be applied.
For TCGA92/S24 (3) purposes, the site of a building or structure includes any land occupied for purposes ancillary to the use of the building or structure.
There are special rules for deemed disposals under TCGA92/S24 (1) or (2), which take place on or after 30 November 1993. CG17700+ tell you about these.
Where a building or structure has been destroyed and the owner uses any compensation to acquire a replacement building, then they may make a claim under TCGA92/S23 (4). CG15740+ tell you about such claims.