Income tax: capital gains: how is the removal of a building from a block of land that does not amount to a loss or destruction, treated for CGT purposes ?

The removal of a building from a block of land does not result in any CGT event happening. Rather, the original asset has been split into two separate assets (the land and the building).

In the event of a subsequent separate disposal of the land and building, the respective cost bases are determined in accordance with section 112-25 of the Income Tax Assessment Act 1997 . That is, where the original asset was acquired post-CGT, its cost base immediately before the removal is apportioned between the split assets.