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Capital gain on disposal of plant after claiming cap alls

I'm hoping I have this right but it comes up so rarely I'd welcome a second opinion.

My client has disposed of 2 substantial items of plant and machinery, one at a price well in excess of cost.  Capital allowances were claimed. My understanding of the treatment of this is that:

Proceeds will be treated as reducing the general pool, but restricted to the original cost of the asset.

The excess over cost will be treated as a chargeable gain.  The asset will not be a wasting asset as capital allowances will be claimed.  Indexation allowance will be available.

I'd be grateful for any thoughts.


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10th Dec 2012 13:30


Your analysis is correct. The only other point that is sometimes relevant is the chattels exemption.

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10th Dec 2012 13:39

Correct, with one further caveat

You don't mention whether or not your client is a company - availability of indexation depends on that.

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10th Dec 2012 14:02

Thank you to both.  Much

Thank you to both.  Much appreciated.  Yes my client is a company.

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