Wasting assets and illustration
You'll learn how wasting assets are treated for capital gains tax purposes and how to calculate the allowable cost on disposal. Wasting assets are assets with a predictable life of less than 50 years—such as patents, copyrights, and licences—and the cost is treated as wasting away on a straight line basis.
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In this lesson
- 0:00 Wasting assets and disposal rules
- 0:24 Calculating allowable cost on disposal
- 0:42 Worked example: patent disposal calculation
About this lesson
When you dispose of a wasting asset, you only claim the cost attributable to the remaining life at the point of sale, not the original purchase price. This video walks you through a worked example showing how to calculate Jane's chargeable gain when she sells a patent, demonstrating why you must use the remaining useful life, not the years already elapsed, to arrive at the correct allowable cost.
Duration: 2m
Transcript
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