CGT loss on demolition of a building?

CGT loss on demolition of a building?

Didn't find your answer?

We have a client who has demolished a building which situated on land that he owns. There are no leases involved in any way.

He has then built a new property on the land.

Is it possible to split the land and the property and claim a loss based on negligible value (or some other way) at the point where the property is worthless?

I know you can do this is the property is destroyed by fire etc but cannot see examples of intended demolition. If not then would the demolition and the rebuild simply be enhancement costs in a final CGT calc on ultimate sale?
Martin Wardle

Replies (3)

Please login or register to join the discussion.

avatar
By User deleted
10th Mar 2008 15:41

What type of property
Are you talking about ,an individual and a residential property or is this a business asset. What is the property going to used for/sold as. If this is to build a house and sell it then this is an Income tax issue and the demolition costs are part of thet. If the property was his home and he builds a new PPR in it's place then there is an example on the HMRC web site. Regards Peter

Thanks (0)
avatar
By m.wardle2
11th Mar 2008 10:01

Property Type / Use
The old property was a hotel used in their trade.

The new property is also a hotel which is used in their trade.

The trade is in a company if that matters.

Thanks (0)
avatar
By User deleted
11th Mar 2008 15:15

CGT on demolition of property
A CGT loss can be claimed. I have personal experience of making such a claim on the demolition of an old building.
The claim I was involved in was circa £76Million.

Thanks (0)