Capital gain on sale of EZ property - how to calculate?

Capital gain on sale of EZ property - how to...

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I have a client who is about to sell a commercial property that he bought about 30 years ago, certainly more than 25 years ago. The property was in an Enterprise Zone and he obtained the IBA (?) on the building element – i.e. excluding the land value - of the property at the time all those years ago.

Say he bought the property for £30k for the land, £200k for the building and now sells for £500k.

Is the gain £500k less £230k? Or is there some adjustment due to the IBA claim of £200k >25 years ago? I know that there is no clawback of the IBA claim but it just seems that same cost is being claimed twice – you get the write off initially against income and then when you sell you also get the same cost available to be deducted from the gain.

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By gbuckell
24th Feb 2012 13:54

Correct

Cost is £230k

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