1. 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

2. 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

3. 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