Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Capital sums derived from assets: section 22 (1)(d) TCGA 1992: use or exploitation of assets

Section 22(1)(d) TCGA 1992 deems a disposal when the owner of an asset receives a capital sum, see CG12980, as consideration for its use or exploitation by someone else.

For example, a capital sum paid to a landowner or farmer for the granting of easements or wayleaves for a term of years or perpetuity, see CG70272.

Chaloner v Pellipar Investments Ltd, 68TC238, provides a useful commentary on the application of section 22(1)(d) to consideration for the use or exploitation of land. In that case, see CG70295, the court drew a distinction between:

  • a part disposal of the owner’s interest in the land when a capital sum is received in circumstances where the owner’s title to land is affected, for example the grant of a lease which gives the lessee the right to actual possession of the land, and
  • a deemed disposal within section 22(1)(d) when a capital sum is received in circumstances where the owner’s title to land is unaffected, for example where he remains entitled to full possession of the land.

In certain circumstances and subject to a claim being made, section 23 TCGA 1992 prevents the receipt of a capital sum within section 22(1)(d) from being treated as an occasion of a disposal where the receipt is applied in restoring a damaged asset or replacing an asset which has been lost or destroyed, see CG15700+.