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As discussed at C2.901A, the capital gains exemption for wasting chattels does not apply where the asset in question was eligible for capital allowances. Such assets are therefore chargeable assets, and the following rules apply in computing gains and losses.

The restriction on allowable expenditure in respect of wasting assets (see C2.902) does not apply to assets used solely for the purposes of a trade, profession or vocation, for which capital allowances have been claimed or could have been claimed¹, or to expenditure which has otherwise qualified in full for any capital allowance².

Where an asset has not qualified for full capital allowances, expenditure and consideration received for disposal are apportioned, the separate parts being dealt with under the rules for wasting assets and the rules for assets which have qualified in full for capital allowances, respectively³. For these purposes, any apportionment of the expenditure and consideration for the disposal which has been made for the purposes of capital allowances is followed⁴. See also CG15440–15455.

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