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HMRC internal manual

# Assets held on 6/4/65: part-disposals after 5/4/65: example

 £ On 6 April 1960 X acquires a chargeable asset for 20000 On 6 April 1970 X disposes of an interest in it for 6000 The market value of the remainder is estimated at 24000 The market value at 31 March 1982 is 30000 On 6 April 1990 X disposes of a further interest for 40000 The market value of the remainder is estimated at 60000 On 6 April 1992 X disposes of the remainder for 80000

Assume that all these amounts are net of expenses.

### Part of original cost attributed to the first part-disposal is

 6000 x £20,000 = £4,000 6,000 + 24,000 . . . .

Therefore allowable expenditure on part retained after first part- disposal is

£20,000 - £4,000 = £16,000.

### Part of this apportioned to second part-disposal is

 40000 x £16,000 = £6,400 40,000 + 60,000 . . . .

Therefore allowable expenditure on part retained after second part-disposal is

£16,000 - £6,400 = £9,600.

### Computation of entire gain on the old basis over period of ownership

 . Amount realised . . 80000 Less Balance of cost . . 9600 . . Unindexed gain . 70400 Less Indexation . 18,000 x 0.747 13446 . . Gain . 56954

(£18,000 is the market value at 31 March 1982 of what is being sold on 6 April 1992.)

### Market value at 6 April 1970 apportioned to second part-disposal.

 60000 x £24,000 = £14,400 60,000 + 40,000 . . . .

### Computation of gain from 6 April 1960 to 6 April 1970

 . Market value at date of part-disposal . 14400 Less Cost . 9600 . . Gain 4800

Proportion of gain 6 April 1965 to 6 April 1970

 5 x £4,800 = £2,400 10 . . . .

Balance of gain from 6 April 1970 to 6 April 1992

equals entire gain minus gain over period to first part-disposal

equals £56,954 minus £4,800

equals £52,154.

### The chargeable gain on the old basis

equals proportion of gain 6 April 1965 to 6 April 1970

plus balance of gain from 6 April 1970 to 6 April 1992

equals £2,400 plus £52,154

equals £54,554.

The final step in the computation would be to make the comparison with the rebased gain (see CG16730+).