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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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PMA: Computer software: Disposal events and disposal values


There is an extra disposal event for computer software. A person who has acquired computer software or a right to use computer software has to bring a disposal value to account if a right to use or otherwise deal with the software is granted to another person for a capital sum. This also applies if the grant is for a consideration that would be a capital sum if it were money.

The person is not required to bring a disposal value to account if the software or right begins to be used for purposes other than the qualifying activity or the qualifying activity is permanently discontinued before the right to use or otherwise deal with the software is granted.

These are the disposal values:

Circumstances Disposal value
The consideration for the grant does not consist solely of money Market value of the right when it is granted
When the grant is made it is made for no consideration or it is made at less than market value Market value unless there is an ITEPA charge on the buyer or the buyer can claim PMAs or RDAs on the asset and the buyer is not a dual resident investing company connected with the seller
Any other case Net consideration received together with any insurance money received as result of an event affecting the consideration and other compensation received