Taxation of Chargeable Gains Act 1992 section 24

Wasting assets

Section 24 (Schedule 4ZZB, paragraph 24) addresses the treatment of wasting assets — assets with a predictable useful life of 50 years or less — when calculating chargeable gains, as amended by the Finance Act 2019.

• A wasting asset is one with a predictable useful life of 50 years or less, and its allowable cost is written down over that lifespan when computing a chargeable gain.
• The write-down reduces the acquisition cost on a straight-line basis from the date the asset was acquired to the end of its expected useful life, so that only the un-expired portion of cost is deductible on disposal.
• This rule ensures that the natural decline in value of a short-lived asset is reflected in the capital gains computation, preventing an artificial loss from being created simply because the asset has worn out.
• Certain categories of asset — notably plant and machinery — are automatically treated as wasting assets regardless of their actual useful life, though specific exemptions and modifications may apply in defined circumstances.