PTP TR - Formula used for the cost figure on a part disposal of a land and property asset

Article ID

kba-03158

Article Name

PTP TR - Formula used for the cost figure on a part disposal of a land and property asset

Created Date

7th December 2012

Product

Problem

On a capital gains supplementary page, what is the formula for calculating the cost which is used in the disposal calculation for a part disposal of a land and property asset?

Resolution

The original cost is multiplied by A/(A+B) where A is the proceeds and B is the part retained 

Original Cost x (A/(A+B)) = Cost used in the disposal calculation

More information may be found here https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12731