Taxation of Chargeable Gains Act 1992 section 44

Meaning of "wasting asset"

Section 44 defines what constitutes a "wasting asset" for capital gains tax purposes and explains how to determine the predictable life and residual value of such assets.

• A wasting asset is one with a predictable life of 50 years or less, but freehold land is never a wasting asset regardless of what is built on it
• Plant and machinery is always treated as a wasting asset with a predictable life of less than 50 years, assessed on the basis of normal use until it becomes unfit for further use
• For tangible movable property, the relevant life is its useful life having regard to the purpose for which the person disposing of it originally acquired it
• A life interest in settled property only becomes a wasting asset when the life tenant's predictable life expectancy falls to 50 years or less, determined by actuarial tables approved by the Board