Section 57 | Receipts etc. which are not treated as disposals but affect relevant allowable expenditure.

(1)This section applies where, in determining the relevant allowable expenditure in relation to a disposal of an asset, account is required to be taken, as mentioned in section 53(3), of any provision of any enactment which, by reference to a relevant event, reduces the whole or any part of an item of expenditure as mentioned in that subsection.

(2)For the purpose of determining, in a case where this section applies, the indexation allowance (if any) to which the person making the disposal is entitled, no account shall in the first instance be taken of the provision referred to in subsection (1) above in calculating the indexed rise in the item of expenditure to which that provision applies but, from that indexed rise as so calculated, there shall be deducted a sum equal to the indexed rise (determined as for the purposes of the actual disposal) in a notional item of expenditure which—

(a)is equal to the amount of the reduction effected by the provision concerned; and

(b)was incurred on the date of the relevant event referred to in subsection (1) above.

(3)In this section “relevant event” means any event which does not fall to be treated as a disposal for the purposes of this Act.