CH6 - Part Disposals

Question 1

Part Disposal

If a taxpayer makes a part disposal, ?

Answer 1

only a proportion of the original cost should be used in calculating the gain.

Question 2

Part Disposal

The allowable cost is: ?

Answer 2

A/(A + B) x acquisition cost

A = gross proceeds, B = value of part retained

Question 3

Part Disposal

The base cost of the asset retained is ?

Answer 3

the acquisition cost reduced by the cost used in the part disposal calculation.

Question 4

Part Disposal

With enhancement expenditure ?

Answer 4

you need to identify whether all or just some of the expenditure relates to the part being sold.

Question 5

Small Part Disposal of Land

A claim can be made to ?

Answer 5

avoid calculating the gain on a small part disposal of land.

Question 6

Small Part Disposal of Land

A part disposal is ‘small’ if both:

Answer 6

• the proceeds of the part disposal are less than or equal to 20% of the value of land; and
• the total proceeds of all land sales in the year do not exceed £20,000.

The proceeds of the small part disposal are deducted from the cost of land.

Question 7

Small Part Disposal of Land

When must a s.242 claim be made by?

Answer 7

The anniversary of 31 January following the tax year of disposal.