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TCGA92/S46

Mr S purchases from a descendant the copyright over the memoirs of a writer 20 years after the end of the year in which the writer died. That copyright is, therefore, a wasting asset since it now has a predictable life of fifty years, see CG76723. He pays the descendant £90,000 for it but does not expect it to have any residual value in fifty years time.

He later sells after twenty years for £80,000.

Subject to any incidental expenses, his Capital Gains computation will be:

Ìý	Ìý	Ìý	Ìý	Ìý	£	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	Disposal Proceeds	Ìý	Ìý	Ìý	Ìý	80,000	Ìý	Ìý	Ìý	Ìý
Less	Acquisition cost [E(1)]	Ìý	Ìý	Ìý	Ìý	90,000	Ìý	Ìý	Ìý	Ìý
Ìý	T(1)	=	20	=	2	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	L	Ìý	50	Ìý	5	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	[E(1)-S]	=	[90,000-0]	=	90,000	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	T(1)	x	[E(1)-S]	=	2	x	90,000	=	36,000	54,000
Ìý	L	Ìý	Ìý	5	Ìý	Ìý	Ìý	Ìý	Ìý	Ìý
Ìý	Gain	Ìý	Ìý	Ìý	Ìý	26,000	Ìý	Ìý	Ìý	Ìý

NOTE. Companies and other concerns within the charge to Corporation Tax may be able to claim indexation allowance see CG17200+.