Capital Allowances Act 2001 section 528

Treatment of demolition costs

Section 528 deals with how the costs of demolishing a qualifying dwelling-house are treated for the purposes of capital allowances, specifically in the context of balancing adjustments.

• When a qualifying dwelling-house is demolished, the net demolition cost can be added to the residue of qualifying expenditure immediately before demolition
• The net cost of demolition is the total demolition cost less any money received for the remains of the property (such as salvaged materials)
• This treatment only applies where the person bearing the demolition cost is also the person on whom a balancing allowance or balancing charge may be made
• The net demolition cost cannot be treated as expenditure on any replacement property