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

Costs of the building

Section 172ZE sets out how to determine the costs of a building for the purposes of calculating allowable deductions in relation to niches, memorials and inscriptions under sections 172ZB to 172ZD.

• Where a building is acquired for trade purposes, its cost is the lower of market value at acquisition and the actual acquisition cost, excluding the cost of the land
• Where a building is constructed for trade purposes, its cost is the construction cost, again excluding the land element, with costs apportioned between land and building on a just and reasonable basis
• Subsequent construction costs after the building was acquired or built are included, but maintenance costs and any costs already deducted as capital expenditure under section 170(2) are excluded
• The term "building" includes any other type of structure, and references to costs incurred cover those borne by either the current trader or a predecessor