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HMRC internal manual

Capital Gains Manual

Assets held on 6/4/65: capital allowances

TCGA92/SCH2/PARA20Where the gain or loss on the disposal of an asset is to be computed by reference to its value at 6 April 1965 the instructions as to the restriction of losses by reference to capital allowances, see CG15400+, should be applied as if the capital allowances for the year 1965- 66 and subsequent years were allowances made in respect of expenditure deemed to have been incurred on the asset on 6 April 1965. The effect of this is that in computing a loss on disposal of the asset, the deemed cost is reduced to the extent that it is covered by those capital allowances. Balancing charges made on the disposal of an asset should be deducted from the total capital allowances for 1965-66 and subsequent years.