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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Correct
Your analysis is correct. The only other point that is sometimes relevant is the chattels exemption.
Correct, with one further caveat
You don't mention whether or not your client is a company - availability of indexation depends on that.