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
|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
|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
|Less||Balance of cost||.||.||9600|
|Less||Indexation||.||18,000 x 0.747||13446|
(£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.
|60,000 + 40,000||.||.||.||.|
Computation of gain from 6 April 1960 to 6 April 1970
|.||Market value at date of part-disposal||.||14400|
Proportion of gain 6 April 1965 to 6 April 1970
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
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
The final step in the computation would be to make the comparison with the rebased gain (see CG16730+).