These are the disposal values for the various disposal events in CA23240.
| Disposal event | Disposal value |
| Sale of the asset | Net proceeds of sale (see CA11540) plus any insurance money received as a result of an event affecting the sale price and any other capital compensation received |
| Sale of the asset at less than market value | Market value unless there is a charge under ITEPA on the buyer or the buyer can claim PMAs or RDAs on the asset and the buyer is not a dual resident investing company connected with the seller |
| Demolition or destruction of the asset | Net amount received for the remains of the asset together with any insurance money received for the demolition or destruction and any other capital compensation |
| Permanent loss of the asset not by demolition or destruction | Any insurance money received for the loss and any other capital compensation |
| Abandonment of an asset used for mineral exploration and access | Any insurance money received for the abandonment and any other capital compensation |
| Permanent discontinuance of the qualifying activity before an event listed above | The disposal value for the event |
| Commencement of the term of a long funding finance lease CA23850 of an asset | The amount which would be recognised as the lessor’s net investment in the lease if accounts were prepared in accordance with generally accepted accounting practice on the date on which the lessor’s net investment in the lease is first recognised in its books or other financial records |
| Commencement of the term of a long funding operating lease of an asset | The market value of the asset at the commencement of the term of the lease |
| Any other event | Market value |
Normally the disposal value of an asset is limited to the
qualifying expenditure incurred on its provision by the person
bringing the disposal value to account. There is one exception to
this. If the person bringing the disposal value to account acquired
it from a connected person or in a series of transactions between
connected persons the limit on that person's disposal value is the
greatest qualifying expenditure incurred by anyone in the chain.
Disposal value is nil in these two cases:
You should remember that the disposal value is nil when the gift
is chargeable on the employee under ICTA88/S148 whether or not tax
is actually charged. The disposal value is nil even if ICTA88/S188
prevents tax from being charged because the transfer price of the
gift is less than £30,000.
You should also remember that there is a nil disposal value
only where an asset is gifted to an employee. It does not apply to
any other kind of transfer.
If an employer transfers an asset to an employee and claims
that the disposal value is nil, you should check that the transfer
is really a gift. A gift is a transfer from one person to another
for no consideration (see CG12921 and CG66451). This means that a
transfer that is a gift cannot have been made wholly and
exclusively for the purposes of the trade and ICTA88/S74 (1)(a)
will prevent a Case 1 deduction (see BIM47110).
An employer cannot be entitled both to a Case 1 deduction and
to have a disposal value of nil on the transfer of an asset to an
employee. If the employer has claimed a Case 1 deduction, the
transfer must have passed the wholly and exclusively test. If it
has passed the wholly and exclusively test, it cannot have been for
no consideration and so it cannot have been a gift. In that case
the employer is required to bring a disposal value to account in
the capital allowance computation.
