Taxation of Chargeable Gains Act 1992 Schedule B1 paragraph 7

Demolition of a building

Schedule B1 paragraph 7 deals with how the demolition of a building on land is treated for the purposes of the Structures and Buildings Allowance (SBA) regime within the chargeable gains framework.

• When a building that qualifies for structures and buildings allowance is demolished, the demolition does not automatically trigger a chargeable gain or loss on the building itself.
• The cost of the demolished building is not lost entirely — it may continue to be relevant in calculating any future gain or loss on the disposal of the underlying land.
• Any residual unrelieved qualifying expenditure on the demolished structure may need to be taken into account when the land is eventually disposed of.
• The provision was introduced by Finance Act 2019 as part of the wider structures and buildings allowance rules to clarify the capital gains treatment where qualifying buildings are knocked down.