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HMRC internal manual

Capital Gains Manual

Capital allowances: wasting assets

TCGA92/S44(1)(c) & TCGA92/S45(1)

A wasting asset is an asset with a predictable life not exceeding 50 years, TCGA92/S44(1) (see CG76700+).

 The disposal of a wasting asset (or an interest in a wasting asset) which:

  • is tangible moveable property (a chattel), and
  • has never qualified for capital allowances, and
  • hasn’t been used as plant in another person’s trade, profession or vocation so as to fall within TCGA92/S45(3B) (see CG76722),

will be an exempt disposal under section 45(1).

Section 44(1)(c) tells you that plant and machinery shall in every case be regarded as having a predictable life of less than 50 years, meaning that plant and machinery are wasting assets.  The phrase “plant and machinery” is not defined in TCGA92.  Guidance on determining whether an asset is plant or machinery is available in the Capital Allowances manual at CA21000+.

NOTE if the plant and machinery is:

  • a chattel, and
  • the disposal consideration is less than £6,000,

then any gain is exempt by virtue of TCGA92/S262 (chattel exemption) whether or not the asset qualified for capital allowances, see CG76550+.

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