Part 3

Trading income
Chapter 9

Trade profits: other specific trades

Cemeteries and crematoria: interests in land

Allocation of ancillary capital expenditure
148
1
The amount of ancillary capital expenditure allocated to the relevant period for the purposes of section 147(2)(b) is the amount given by the formula—
RE × PSR/(PAR + PSR)
where—
RE means residual expenditure (see subsection (2)),
PSR means the number of grave-spaces or memorial garden plots in the cemetery or memorial garden sold in the relevant period, and
PAR means the number of grave-spaces or memorial garden plots in the cemetery or memorial garden which are or could be made available for sale at the end of the relevant period.
2
“Residual expenditure” means the total of all ancillary capital expenditure incurred at any time before the end of the relevant period, less—
a
ancillary capital expenditure incurred on buildings or structures which were destroyed before the beginning of the first sale period,
b
the excluded amount of any remaining old expenditure (see subsection (3)),
c
if, after the beginning of the first sale period and before the end of the relevant period, an asset representing ancillary capital expenditure was sold or destroyed, the net sale proceeds or the compensation, and
d
any amount deducted under section 147(2)(b) above, or under section 170(2)(b) of ITTOIA 2005, for a period of account ending before the relevant period.
3
The excluded amount of remaining old expenditure is calculated by multiplying the remaining old expenditure by the fraction—
PSB/(PAB + PSB)
where—
PSB means the number of grave-spaces or memorial garden plots in the cemetery or memorial garden sold before the beginning of the basis period for the tax year 1954-55, and
PAB means the number of grave-spaces or memorial garden plots in the cemetery or memorial garden which were or could have been made available for sale immediately before the beginning of the basis period for that tax year.
4
In this section—
- “compensation”, in relation to the destruction of an asset, means—
  1. insurance money or other compensation received by the trader, or a predecessor, in respect of the destruction, and
  2. money received for the remains of the asset by the trader or predecessor,
- “the first sale period” means—
  1. the period of account in which an interest in land in the cemetery or memorial garden was first sold for the purposes of the trade with a view to the land being used for the purpose of interments or for memorial garden plots, or
  2. if later, the basis period for the tax year 1954-55, and
- “remaining old expenditure” means ancillary capital expenditure which—
  1. was incurred before the beginning of the basis period for the tax year 1954-55, and
  2. does not fall within subsection (2)(a).
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)
S. 146 crossheading substituted (1.3.2012) by The Enactment of Extra-Statutory Concessions Order 2012 (S.I. 2012/266), arts. 1, 5(2) (with art. 5(5))