Commentary

C2.114 Linked transactions

Capital gains tax
Capital gains tax | Commentary

C2.114 Linked transactions

Capital gains tax | Commentary

C2.114 Linked transactions

Special provisions apply where, within a period of six years, a person makes a series of disposals to a person or persons with whom he is connected1. In the normal way, each transaction would be treated as made for a consideration equal to the market value of the asset at the time of transfer. The provisions are intended to counter avoidance of tax where the market value of the total transactions, taken together, exceeds the total of the market values of the individual transactions2. Common examples are:

  1.  

    •     a set of antique furniture or pictures, or

  2.  

    •     a substantial holding of ordinary shares in an unquoted company

A 'material transaction' is one by way of gift or otherwise, and material transactions are linked if they occur within a period of six years3.

Recomputation of market value

The 'original market value' means the market value of assets disposed of in a particular transaction, without regard to other disposals in the series4.

The 'aggregate market value' in respect of a particular transaction in the series means what would have been the market value if all the assets disposed of up to that time had been transferred by a single disposal5. The assets taken into account in the 'series' need not only be a group or holding or collection of assets but may be assets brought together physically or in law so as to continue as a single asset or as different assets from what they were previously (this could include a transfer

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