A building or semi-permanent structure in the nature of a building is in law part of the land on which it stands and the whole represents a single asset1. As a result, without special provision, it would not be possible for land and buildings to come within the capital gains reliefs which apply on the destruction or loss of an asset or where an asset becomes of negligible value. Although it is possible for a building to be destroyed, land cannot be destroyed and is unlikely to become of negligible value. This article discusses the special provisions which apply specifically to buildings which are damaged, destroyed or of negligible value.
Compensation for damage to a building
Where compensation or insurance proceeds are received in respect of damage to an asset, there is a part disposal of the owner's interest in the asset2. See C2.501A.
Where all or part of the compensation is applied in restoring the asset, the owner may claim relief by setting off the compensation against the expenditure
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