C1.322 Time of disposal
Where an asset is disposed of and acquired under an unconditional contract, the time at which the disposal and acquisition are made is the time that the contract is made and not, if different, the time at which the asset is conveyed or transferred1. For CGT to apply there also needs to be a transfer of beneficial interest at the relevant time2.
This general provision is subject to TCGA 1992, s 22(2) (see C1.319) under which a disposal arising from the receipt of a capital sum in one of the circumstances mentioned in TCGA 1992, s 22(1) is treated as taking place when the capital sum is received3.
In Jerome4, the House of Lords held that what was then CGTA 1979, s 27(1) (now TCGA 1992, s 28(1)) was concerned solely with fixing the time of the disposal by a person whose identity had to be ascertained by other means. It was not intended to deal with a substantive liability to tax. It did not deem the contract to be the disposal.
The facts of that case were complex. In that case, on 16 April 1987 trustees holding land for various beneficiaries in undivided shares entered into a contract to sell it to a purchaser. In 1989 the taxpayer and his wife, who were absolutely entitled to interests in the land, assigned part of their beneficial interests, subject to the contract, to the trustees of two Bermuda settlements. By three conveyances in 1990–1992, the original trustees completed the contracts