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HMRC internal manual

Capital Allowances Manual

PMA: Computer software: Limit on disposal value

There is an overall limit on disposal values. Normally they cannot exceed the qualifying expenditure CA23250. Where the asset is computer software or a right to use or deal with computer software there may be a series of disposal values. If so the total disposal values brought to account cannot exceed the qualifying expenditure.

Example Bruce buys computer software for £15,000. The cost is qualifying expenditure. He grants Stephen a licence to use that software for £10,000.When he does that he has to bring a disposal value of £10,000 to account. Six months later he grants a licence to Kevin for £8,000. The disposal value he has to bring to account then is restricted to £5,000 because £10,000 of the cost of £15,000 was used up when Bruce granted the lease to Stephen.