CG12760 - Part-disposals: what is the asset

Sometimes you have to decide what is the asset before you can determine whether a disposal is an entire or a part- disposal. The word 'asset' is not defined in the TCGA92 and therefore must be given its natural meaning, subject to any inferences which can be drawn from the Act itself. From TCGA92/S38 and TCGA92/S42 it follows that an 'asset' is whatever is covered by a specific item of expenditure on an acquisition, whether made by purchase or otherwise (such expenditure being allowable under Section 38(1) (a), see CG15160.

See, however, CG71850+ as regards the practice under which a part-disposal of land may in certain circumstances, be regarded as a disposal of a separate asset.

Expenditure enhancing the value of an asset allowable under Section 38(1) (b) may alter the character of the asset but does not create a new asset. For example, if an established newsagent purchases an additional paper round and merges it with the main business, this is an addition to existing goodwill, not the acquisition of a separate asset.