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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Capital sums derived from assets: section 22 TCGA 1992

Chargeable gains and allowable losses accrue on the disposal of assets.

As the word ‘disposal’ is not expressly defined in TCGA 1992 it must be given its normal everyday meaning. Therefore, disposals for capital gains purposes include natural disposals and part disposals of assets, see CG12700+.

There are occasions when a person may receive a capital sum even though a natural disposal of an asset has not occurred, for example, on receiving compensation for damage to an asset or a sum of money from another person for the right to use or exploit an asset.

When a capital sum is derived from an asset section 22 TCGA 1992 treats the owner as having made a disposal for capital gains purposes.

This part of the guidance looks at situations where section 22 deems a disposal to have taken place when a capital sum is derived from an asset.