Revenue Precedents

On a strict interpretation a loss arising on a deemed disposal under section 538(2) is allowable only in the year of claim. However, in practice, a claim made within twelve months of the end of the year of assessment or accounting period for which relief is sought will be admitted, provided that the asset was of negligible value in the year of assessment or account period concerned. G35(2).

Where a partnership has written off goodwill in the balance sheet and a partner makes a subsequent disposal of his share in partnership assets, including goodwill, the partner is treated as realising a loss on the goodwill if he has a cost greater than nil. G36(A).