Commentary on Sections Overview Overview Section 891: Realisation and acquisition of fungible assets
2262.This section gives identification rules for transactions involving fungible assets treated as comprising separate pools under the previous section. It is based on paragraph 126 of Schedule 29 to FA 2002.
2263.Identification rules are necessary to determine which of the two pools a transaction in fungible assets diminishes or expands. And they are also necessary because the nature of fungible assets is such that it could often be relatively easy to dispose of an asset of this kind held before 1 April 2002 and replace it immediately afterwards with a newly acquired, identical asset. The intangible fixed assets rules are not intended to apply to assets “recycled” in this way.