Taxation of Chargeable Gains Act 1992 section 45

Exemption for certain wasting assets

Section 45 provides an exemption from capital gains tax on the disposal of tangible movable wasting assets, but removes that exemption where the asset has been used for trade purposes and has attracted capital allowances.

• Gains on the disposal of tangible movable wasting assets (those with a predictable life of 50 years or less) are generally exempt from capital gains tax, but this exemption does not apply where the asset has been used solely for trade purposes and capital allowances have been, or could have been, claimed on it.
• Where a wasting asset has been used partly for trade and partly for private purposes, or has only partly qualified for capital allowances, the disposal proceeds and allowable expenditure must be apportioned, with the exemption removed only for the trade-use or capital-allowance portion of the gain.
• Since April 2015, the exemption is also denied where an asset becomes plant solely because another person uses it in their trade, and the asset would not otherwise be a wasting asset — unless the disposal relates to a long funding lease occurring during the lease term or on its deemed termination.
• The exemption does not apply to disposals of commodities made by or through a person dealing on a terminal market.