Part disposals Part disposals Special rules apply when only part of an asset is disposed of Example – sale of 5 acres of land out of a property of 20 acres If a portion of the asset is sold then only a portion of the cost can be deducted in calculating the gain

Part disposals Part disposals Formula used to calculate allowable cost of the part disposed Original cost x A/(A+B) A is the sale proceeds for the part disposed B is the market value of the remaining undisposed part of the asset This allows for different part of the asset having different values

Part disposals Part disposals In a future disposal of the remaining part, the allowable cost is the original cost less the allowable cost used against the part disposal Incidental costs must be apportioned in the same way Enhancement expenditure is also apportioned in the same way