Capital Allowances Act 2001 section 433

Treatment of demolition costs

Section 433 deals with how the net cost of demolishing an asset that represents qualifying expenditure is treated for the purposes of calculating balancing allowances or balancing charges.

• When an asset representing qualifying expenditure is demolished, the net cost of demolition is added to the qualifying expenditure for the period in which demolition occurs
• The net cost of demolition is the amount by which the demolition cost exceeds any money received for the remains of the asset
• The adjusted qualifying expenditure figure is then used to calculate any balancing allowance or balancing charge
• The net demolition cost cannot also be treated as expenditure on any replacement asset, preventing double relief