Part Disposals

Question 1

Part Disposals

The Allowable Cost When an Asset is Part Disposed is:

Answer 1

A/(A + B) x Acquisition Cost

A = Gross Proceeds
B = Value of Part Retained

Question 2

Part Disposals

What Must be Determined With Enhancement Expenditure?

Answer 2

How Much of The Cost Relates to The Part Being Sold.

Question 3

Part Disposals

A Part Disposal is ‘Small’ if Both:

Answer 3

• Sale Proceeds Don’t Equate to More Than 20% of The Land’s Value
• Total Sale Proceeds of Land Disposals Do Not Exceed £20,000

Question 4

Part Disposals

The Effect of an s.242 Claim is Twofold:

Answer 4

1. No CGT is Due on The ‘Small Proceeds’.
2. The ‘Small Proceeds’ Are Deducted From The Land’s Base Cost c/fwd.

Question 5

Part Disposals

When Must an s.242 Claim be Made?

Answer 5

31 January Following The Tax Year of Part Disposal.