Capital Allowances Act 2001 section 26

Demolition costs

Section 26 explains how the net cost of demolishing plant or machinery that was last used for a qualifying activity is treated for capital allowances purposes, depending on whether or not the asset is replaced.

• The section applies when plant or machinery last used for a qualifying activity is demolished
• If replacement plant or machinery is acquired, the net demolition cost is added to the cost of the replacement asset for capital allowances purposes
• If no replacement is acquired, the net demolition cost is added to the capital allowances pool to which the original asset belonged
• The net cost of demolition is the excess of demolition costs over any proceeds received for the remains of the demolished asset