CG13120 - Introduction and computation: occasions of charge: assets lost/destroyed/negligible value: introduction

S24 TCGA92

Under s22 TCGA92, the receipt of a capital sum which is derived from an asset is treated as being a disposal of that asset (see CG12940). The following paragraphs consider situations where a disposal is treated as taking place but no capital sum is necessarily received (see CG12980) so that an allowable loss may accrue.

There are two basic situations where there is a disposal of an asset without there necessarily being a receipt of a capital sum. These are the actual loss of the asset (see below), and the deemed loss of the asset (see CG13125). You should, however, remember that any compensation for the loss, such as an insurance receipt, may give rise to a Capital Gains Tax charge (see CG12948 onwards). Where such compensation is used to restore or replace the original asset, see CG15700+.

S24(1) TCGA92 - Entire loss or destruction of asset

Here we are looking at the actual loss of an asset. Under s24(1) TCGA92, where the asset has been entirely lost, destroyed, dissipated or extinguished, then that is a disposal of the asset for Capital Gains Tax purposes. Under s16(2) TCGA92, assuming that a gain on a disposal of the asset would have been a chargeable gain, then such a disposal will give rise to an allowable loss. See, however:

• CG12340 if an option has been abandoned for no consideration
• CG12965 regarding the interaction of s24 TCGA92 with s22 TCGA92 if any capital sum by way of compensation or otherwise is received
• CG13137 if buildings and structures on land have been destroyed
• CG17700+ where indexation allowance is available
• CG68070 if goodwill is claimed to have been destroyed.