Commentary

C2.1128 Computation of gains and losses

Capital gains tax
Capital gains tax | Commentary

C2.1128 Computation of gains and losses

Capital gains tax | Commentary

C2.1128 Computation of gains and losses

The rules in C2.1125–C2.1129A apply to disposals made prior to 6 April 2019. For disposals made on or after 6 April 2019, see C2.1139–C2.1173. Transitional rules apply to unused losses existing at 6 April 2019 that have accrued on disposals made prior to that date. See C2.1142 for further details.

TCGA 1992, Sch 4ZZA contains the general rules for computing gains and losses that are ATED-related on a relevant high value disposal1 (see C2.1127).

In very broad terms, this can either be done by reference to formulae set out in TCGA 1992, Sch 4ZZA, para 3 (the ATED-related proportion of the gain or loss) and para 4 (the part of the gain or loss which is not ATED related). This method of calculation applies where no election has been made under TCGA 1992, Sch 4ZZA, para 5 and the interest was held on 5 April 2013, 5 April 2015, or 5 April 2016. In cases where an election has been made or where the interest was purchased after 5 April 2016, a time-apportioned amount of the gain accruing over the entire period of ownership must be calculated, with the ATED-related gain being based on the number of ATED chargeable days since the later of 31 March 1982 and the date of acquisition over the total number of days since that date2.

Whilst the charge will apply on all qualifying disposals after 5 April 2013, the automatic rebasing provisions will mean that, unless the taxpayer elects out, CGT

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