CG13122 - Assets lost/destroyed/negligible value: date of deemed disposal/reacquisition

The decision in Williams v Bullivant (56TC159) established the general rule that the date of the deemed disposal and reacquisition is the date of the claim. Any resulting loss thus arises at the date of the claim. ESC/D28 (see CG13125+) allowed a degree of retrospection. For claims made on or after 6 April 1996, the changes made by FA96/SCH39/PARA4 achieve the result previously given by ESC/D28. For claims made on or after 6 April 1996 where the asset has become of negligible value, the taxpayer may generally claim that the asset be deemed to have been disposed of and reacquired at the time of the claim or at an earlier time. An earlier time may be specified for the claim if

• the taxpayer owned the asset at the earlier time; and
• the asset had become of negligible value at the earlier time; and
• for a person other than a company, the earlier time is not more than two years before the beginning of the year of assessment in which the claim is made, or
• in the case of a company, the earlier time is on or after the first day of the earliest accounting period ending not more than two years before the time of the claim.

However, an earlier time may not be specified if a loss arising on a deemed disposal at the time of the claim would not have been an allowable loss because of the exemptions allowed by Part 1 of Schedule 7AC TCGA 1992 (exemptions for disposals by companies with substantial shareholdings), see CG53210.