CG76590 - Chattels: losses
TCGA92/S262 (3)
CG76550+ tell you what happens when a gain arises on the disposal of a chattel (tangible moveable property).
If the consideration for the disposal of a chattel does not exceed 拢6,000, any loss is restricted. You do this by substituting 拢6,000 for the original figure of disposal consideration.
If the consideration for the disposal of a chattel exceeds 拢6,000, there is no restriction to any loss.
If an asset is acquired for 拢6,000 or less and disposed of for a lesser amount, no allowable loss accrues on that disposal.
Example
Mr C sells his son a painting for 拢5,000. It had originally cost him 拢8,000. He claims a loss of 拢3,000.
As this is a transaction between connected persons, see CG14580 onwards, the market value of the asset is used as the disposal consideration. The painting has a market value of 拢4,000.
However, as the market value is less than 拢6,000, the loss is restricted to:
| 听 | 拢 |
|---|---|
| deemed consideration | 6,000 |
| less cost | 8,000 |
| RESTRICTED LOSS | 2,000 |
NOTE Companies and other concerns within the charge to Corporation Tax may be able to claim indexation allowance, see CG17207 onwards.