Capital Allowances Act 2001 section 72

Disposal values

Section 72 sets out the rules for calculating disposal values when a person who has claimed capital allowances on computer software (or on the right to use computer software) grants someone else a right to use or deal with that software.

• When you grant someone a right to use computer software on which you have claimed capital allowances, you must normally bring a disposal value into account in your capital allowances computation.
• If the grant is not entirely for cash, or is made at undervalue to certain connected or non-qualifying parties, the disposal value is the market value of the right at the time of the grant.
• In straightforward cash transactions, the disposal value is the net cash received, plus any relevant insurance proceeds or capital compensation.
• No disposal value is required if, before the grant, a disposal event has already occurred because the software ceased to be used for the qualifying activity or the qualifying activity was permanently discontinued.