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HMRC internal manual

Capital Gains Manual

Capital allowances: wasting assets qualifying in part for

TCGA92/S45 (3) & TCGA92/S47 (2)

If expenditure on a wasting asset has only partly qualified for capital allowances then both the consideration and the expenditure (allowable under TCGA92/S38 (1)(a), (b)) are to be apportioned and the rules relating to wasting assets and capital allowances applied separately?

  • TCGA92/S46 or TCGA92/SCH8/PARA1 (wasting assets: restriction of allowable expenditure) would apply in the computation of the gain apportioned to the private use of the asset, see CG15450 and CG71141+, and
  • TCGA92/S45 (2) and TCGA92/S47 (1) would apply to the computation of the balance of the gain, see CG15451.

In making the apportionment of the expenditure you should have regard to the extent to which the asset qualified for capital allowances over the whole period of ownership. The apportionment of the consideration should follow any apportionment of the consideration which has been made for capital allowances purposes. If no such apportionment has been made it should normally follow the apportionment of the expenditure.