Commentary

C2.104 Value added tax

Capital gains tax
Capital gains tax | Commentary

C2.104 Value added tax

Capital gains tax | Commentary

C2.104 Value added tax

Where VAT is charged on the disposal of an asset, the VAT is excluded from the consideration for the purpose of computing chargeable gains or allowable losses1.

For the treatment of VAT on the purchase of an asset, see C2.210.

A person whose output is partly exempt and partly taxable may set off only part of his VAT on inputs against his VAT on outputs. In such a case, although the computation of disposal proceeds is as above, it is necessary to allocate the VAT ultimately suffered to the various expense payments made. Inspectors are prepared to consider

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