CA23420 - PMA: Computer software: Disposal events and disposal values

CAA01/S72

There is an extra disposal event for computer software. A person who has acquired computer software or a right to use computer software has to bring a disposal value to account if they grant a right to use or otherwise deal with the software to another person for a capital sum. This also applies if the grant is for a consideration that would be a capital sum if it were money.

The person is not required to bring a disposal value to account if the software or right begins to be used for purposes other than the qualifying activity or the qualifying activity is permanently discontinued before the right to use or otherwise deal with the software is granted.

These are the disposal values:

Circumstances	Disposal value
The consideration for the grant does not consist solely of money	Market value of the right when it is granted
When the grant is made it is made for no consideration or it is made at less than market value	Market value of the right when it is granted unless there is an ITEPA charge on the grantee or the grantee can claim PMAs or RDAs on the asset and the grantee is not a dual resident investing company connected with the grantor
Any other case	Net consideration received together with any insurance money received as result of an event affecting the consideration and other compensation received