Part II General Provisions relating to computation of gains and acquisitions and disposals of assets
Chapter III Computation of gains: General provisions
F1Cash basis accounting
47AExemption for disposals by persons using cash basis
1
No chargeable gain shall accrue on the disposal of, or of an interest in, an asset if conditions A to D are met in relation to the asset.
2
Condition A is that the asset is—
a
tangible movable property, and
b
a wasting asset.
3
Condition B is that, at any time during the period of ownership of the person making the disposal, the asset has been used for the purposes of a trade, profession or vocation carried on by the person.
4
Condition C is that an election under section 25A of ITTOIA 2005 (cash basis for small businesses) has effect in relation to the trade, profession or vocation at the time of the disposal.
5
Condition D is that—
a
any expenditure attributable to the asset or interest under paragraph (a) or (b) of section 38(1) has been brought into account in calculating the profits of the trade, profession or vocation on the cash basis, or
b
any of that expenditure would have been so brought into account if an election under section 25A of ITTOIA 2005 had had effect in relation to the trade, profession or vocation at the time the expenditure was paid.
6
Subsection (7) applies in the case of the disposal of, or of an interest in, an asset which, in the period of ownership of the person making the disposal—
a
has been used partly for the purposes of the trade, profession or vocation and partly for other purposes, or
b
has been used for the purposes of the trade, profession or vocation for part of that period.
7
In such a case—
a
the consideration for the disposal, and any expenditure attributable to the asset or interest by virtue of section 38(1)(a) and (b), shall be apportioned by reference to the extent to which that expenditure was, or (as the case may be) would have been, brought into account as mentioned in subsection (5) above,
b
the computation of the gain shall be made separately in relation to the apportioned parts of the expenditure and consideration, and
c
subsection (1) above shall apply to any gain accruing by reference to the computation in relation to the part of the consideration apportioned to use for the purposes of the trade, profession or vocation.
Ss. 47A, 47B and cross-heading inserted (with effect in accordance with Sch. 4 paras. 56, 57 of the amending Act) by Finance Act 2013 (c. 29), Sch. 4 para. 45