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HMRC internal manual

Capital Allowances Manual

MEA: Allowances and charges: Disposal receipts: limitation on disposal value

The disposal value to be taken into account in respect of an asset cannot exceed the expenditure on that asset.

Any excess of proceeds over historic cost may give rise to a chargeable gain. Where disposal proceeds are less than cost, the net capital allowances will restrict any allowable loss for capital gains purposes as a result of TCGA92/S41 (2). If the asset is land the capital gains computation will bring in the undeveloped market value excluded from the MEA computations by CAA01/S404 and CAA01/S424.