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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Capital Gains Manual: Introduction and computation: occassions of charge: Part-disposals: formula for apportioning expenditure

Apportionment of expenditure A part-disposal is the disposal of only part of an asset. Therefore only part of the allowable expenditure can be deducted in the computation of the gain accruing on a part-disposal. The allowable expenditure should normally be apportioned by reference to

A = the disposal consideration, and

B = the value of the part retained at the time of the part-disposal

The fraction of the expenditure which is allowable in the computation of the gain accruing on the part-disposal is


    A + B

The remainder of the expenditure is allowable on a future disposal of the part retained. This treatment does not apply to

  • sub-leases granted out of short leases, see CG71000+, or
  • allowable expenditure which is wholly attributable


  • to the part which is disposed of, or
  • to the part which remains undisposed of,which should be so allocated and not subjected to the apportionment formula. See also CG71850+, revised practice applying to part-disposals of land.


A permanent note should be kept of the balance of the cost allocated to the part of the asset retained, for use in computing the gain or loss on any subsequent disposal or part-disposal.

A person buys an asset for £40,000 and sells a part of it for £15,000 at a time when the value of the remainder of the asset is £45,000. The part of the cost apportioned to the disposal is

      £40,000 x         15,000                    = £10,000

                      15,000 + 45,000


The adjusted cost of the remainder of the asset (for the purposes of any later disposal) is

£40,000 - £10,000 = £30,000.