Excess expense

My clients Mr and Mrs S have obtained planning permission on semi-derelict farm buildings acquired some years ago which when sold will produce a substantial gain. The buildings have been used for hobby and storage by my clients (no trade use) and the plan is to sell them to a developer/DIY builder as they stand. The planning permission is specific in that it requires the removal of an adjacent asbestos building not owned by my clients. The neighbouring farmer has agreed as long as my clients pay for the cost of the demolition (£16 000) and erect a replacement building at his yard some miles away at a cost of £24 000. I have checked this expenditure with HMRC and they consider that it will not qualify for relief for capital gains tax as it is neither:

• an amount paid for the asset;
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