Part 2Trading income

Chapter 11Trade profits: other specific trades

F1Crematoria: niches, memorials and inscriptions

172ZECosts of the building

(1)

For the purposes of sections 172ZB to 172ZD, the costs of a building are to be determined in accordance with this section.

(2)

If the building was acquired for the purposes of the trade, the costs of the building are the lower of—

(a)

the market value of the building when it was acquired, and

(b)

the costs incurred in acquiring the building.

(3)

If the building was constructed for the purposes of the trade, the costs of the building are the costs incurred in constructing the building.

(4)

In either case—

(a)

the acquisition cost (or market value) of the land on which the building is situated is to be ignored, and

(b)

for these purposes, costs (or values) are to be apportioned between the land and the building on a just and reasonable basis.

(5)

Any construction costs incurred with respect to the building after it was acquired or constructed for the purposes of the trade must be brought into account as costs of the building.

(6)

But costs incurred in maintaining the building must not be brought into account.

(7)

Costs must not be included as costs of the building if a deduction is or is to be brought into account for them under section 170(2) (deduction for capital expenditure).

(8)

A reference in this section to costs incurred is to costs incurred either by the trader or a predecessor.

(9)

In sections 172ZB to 172ZD and this section, “building” includes any other type of structure.