What is a part disposal for CGT purposes?
Answered 17 March 2026
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What is a Part Disposal for CGT Purposes?
What the law says
Definition — TCGA 1992, s.21(2)
References to a "disposal of an asset" include references to a part disposal of an asset. There is a part disposal of an asset in two situations:
- Where an interest or right in or over the asset is created by the disposal (as well as where it subsists before the disposal); and
- Generally, where on a person making a disposal, any description of property derived from the asset remains undisposed of.
In short: if you dispose of part of an asset (or an interest in it) while retaining the rest, that is a part disposal.
Computation — TCGA 1992, s.42
Where a person disposes of an interest or right in or over an asset, and generally wherever on a disposal any property derived from that asset remains undisposed of, the allowable expenditure under s.38(1)(a) and (b) must be apportioned. The apportionment is made by reference to:
- A = the amount or value of the consideration for the disposal; and
- B = the market value of the property which remains undisposed of.
The fraction of allowable expenditure deductible in computing the gain on the disposal is A ÷ (A + B); the remainder is attributed to the property still held.
The apportionment is not required where, on the facts, the expenditure is wholly attributable to what is disposed of, or wholly attributable to what remains undisposed of.
HMRC guidance / practice
The A/(A+B) formula in practice
HMRC confirms that allowable expenditure should normally be apportioned using the formula: Expenditure × (A ÷ (A + B)), where A is the disposal consideration and B is the market value of the part retained at the time of the part disposal. A valuation of the part retained will be needed from the Valuation Office Agency (for land and buildings) or Shares and Assets Valuation (for other assets).
Goodwill example
HMRC treats goodwill as a single asset. The sale of part of a business as a going concern therefore involves a part disposal of the global goodwill, and the s.42 A/(A+B) formula applies. TCGA 1992, s.42(4) gives statutory authority to disapply the formula where expenditure can be identified wholly with the part disposed of or wholly with the part retained, but HMRC considers this will be extremely limited in the case of goodwill.
Judicial confirmation
The Upper Tribunal confirmed in Tenconi v HMRC that s.21(2) TCGA 1992 expressly provides that references to a disposal include references to a part disposal, and that there is a part disposal where an interest or right in or over the asset is created by the disposal, as well as where it subsists before the disposal.
Citation sources
Part II General Provisions relating to computation of gains and acquisitions and disposals of assets Chapter III Computation of gains: General provisions Allowable deductions Part disposals. 42 1 Where a person disposes of an interest or right in or over an asset, and generally wherever on the disposal of an asset any description of property derived from that asset remains undisposed of, the sums which under paragraphs (a) and (b) of section 38(1) are attributable to the asset shall, both for th
Allowable expenditure should normally be apportioned by using the formula: Expenditure allowable in the capital computation for the part disposed = Expenditure x (A / (A +B)) where A = the disposal consideration B = the market value of the part retained at the time of the part disposal It will be necessary to ask either the Valuation Office Agency (“VOA”), for land and buildings, or Shares and Assets Valuation (“SAV”), for any other assets, to provide a valuation of the part retained.
Introduction 1. The appellant, Mr Tenconi, appeals against a decision of the First-tier Tribunal (Tax Chamber) (“FTT”) published as John Tenconi v HMRC [2021] UKFTT 107 (TC). Dismissing his appeal, the FTT upheld the closure notice HMRC had issued in the amount of £175,158.59 in respect of Mr Tenconi’s liability to capital gains tax (“CGT”). The FTT held that, when Mr Tenconi transferred his beneficial interest in certain distribution rights in a company (which it considered were assets under s2
arlier disposal was restricted under the provisions of section 41. 4 This section shall not be taken as requiring the apportionment of any expenditure which, on the facts, is wholly attributable to what is disposed of, or wholly attributable to what remains undisposed of. 5 It is hereby declared that this section, and all other provisions for apportioning on a part disposal expenditure which is deductible in computing a gain, are to be operated before the operation of, and without regard to, sec
For CG purposes, we regard goodwill as a single asset, see CG68020. The sale of part of a business as a going concern will, therefore, involve a part-disposal of the global goodwill of the business and the computational rules in TCGA92/S42 will apply. Where part of a business is sold as a going concern the sums allowable as a deduction in the computation will normally be apportioned by reference to the A/A+B part-disposal formula in TCGA92/S42(2). “A” is the value or proceeds of the goodwill of
Part II General Provisions relating to computation of gains and acquisitions and disposals of assets Chapter II Assets and disposals of assets General provisions Assets and disposals. 21 1 All forms of property shall be assets for the purposes of this Act, whether situated in the United Kingdom or not, including— a options, debts and incorporeal property generally, and b currency, with the exception (subject to express provision to the contrary) of sterling, c any form of property created by the