Wasting chattels
In this lesson, you'll learn how wasting chattels are treated for capital gains tax purposes and why the rules change when capital allowances are involved.
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In this lesson
- 0:00 Wasting chattels and capital gains exemption
- 0:15 Exception: wasting chattels used in trade
- 0:28 Why capital allowances affect gains and losses
- 1:38 Movable plant and machinery treatment
- 2:03 Worked example: Patrick's plant disposal
About this lesson
Wasting chattels are generally exempt from capital gains tax when disposed of, but this exemption doesn't apply if the asset has been used in a trade and capital allowances have been claimed. When that exception applies, any gain on disposal becomes taxable, and any loss is not allowable. You'll see how this works in practice with movable plant and machinery—the most common example in tax exams—and understand why capital allowances create this special rule: because they've already compensated you for the asset's expected fall in value, you can't claim a capital loss as well.
Duration: 2m
Transcript
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