Income Tax (Trading and Other Income) Act 2005 section 172ZB

Allowable deductions: niches

Section 172ZB sets out the tax deductions that are permitted when income from the sale of a niche is brought into account as a trading receipt.

• Two-thirds of the costs of forming the niche (including its lining and any associated tablet) are allowable as a deduction
• If the niche is in a building used wholly or mainly for providing niches, a further deduction of two-thirds of the associated building costs is available
• Associated building costs are calculated as the proportion of total building costs that corresponds to the area the niche occupies relative to the whole building
• Where the area-based proportion cannot reasonably be calculated, a just and reasonable alternative basis may be used instead