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HMRC internal manual

Capital Gains Manual

Capital allowances: deemed disposals and reacquisitions

TCGA92/S47 - deemed disposals and reacquisitions

In certain situations the owner of an asset is treated as having disposed of and reacquired that asset at market value at a given date.  The result is that the reacquisition cost is not expenditure in respect of which any capital allowance is made.  The following sections allow TCGA92/S47 to operate as intended:

  • TCGA92/SCH3/PARA3 for the purpose of rebasing to 31 March 1982 (see CG16900),
  • TCGA92/S55(3) for the purpose of computing indexation by reference to market value at 31 March 1982, see CG17450),
  • TCGA92/SCH2/PARA2 for the purpose of assets held at 6 April 1965, see CG15510).

In these specific instances section 47 applies by treating any capital allowance as if it were made in respect of the expenditure that was deemed to have been incurred by the owner of the asset in reacquiring the asset.