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Version status: In force | Document consolidation status: Updated to reflect all known changes
Version date: 18 December 2023 - onwards
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536. Capital sums: receipt of compensation and insurance moneys not treated as a disposal in certain cases.

(1)

(a) Subject to paragraph (b), where the recipient so claims, receipt of a capital sum within subparagraph (i), (ii), (iii) or (iv) of section 535(2)(a) derived from an asset which is not lost or destroyed shall not be treated as a disposal of the asset if -

(i) the capital sum is wholly applied in restoring the asset, or

(ii) the capital sum is applied in restoring the asset except for a part of the capital sum which is not reasonably required for the purpose and which is small as compared with the whole capital sum;

but, if the receipt is not treated as a disposal, all sums which, if the receipt had been so treated, would have been taken into account as consideration for that disposal in the computation of a gain accruing on the disposal shall be deducted from any expenditure allowable under Chapter 2 of this Part as a deduction in computing a gain on the subsequent disposal of the asset.

(b) Paragraph (a) shall not apply to cases within subparagraph (ii) of that paragraph if imme

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