Commentary

C2.605 Gains deferred on disposals before 6 April 1988

Capital gains tax
Capital gains tax | Commentary

C2.605 Gains deferred on disposals before 6 April 1988

Capital gains tax | Commentary

C2.605 Gains deferred on disposals before 6 April 1988

The provisions discussed in this article only apply to companies.

Rebasing effectively eliminates gains accruing for periods before 31 March 1982, but only in relation to disposals after 5 April 1988. It takes no account of gains referable to a period before 31 March 1982 which have been deferred on a disposal after that date but before 6 April 1988, either under rollover or holdover provisions or under relieving provisions which allow gains to be postponed until the occurrence of a particular event. However, for corporation tax purposes a measure of relief in lieu of rebasing is given by providing that the amount of the deferred gain is halved when it is brought into charge after 5 April 19881.

Charges rolled over or held over

The relief applies to gains rolled over or held over under the following provisions2:

  1.  

    (a)     rollover relief where compensation or insurance money received following the loss or destruction of an asset is invested in a replacement asset3

  2.  

    (b)     rollover relief on the replacement of land compulsorily purchased4

The relief only applies where there has been a disposal (the deferral disposal) before 6 April 1988 on which tax on the gain was deferred under either of the provisions

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