Timing of disposal for capital gains tax

Produced by Tolley
  • (Updated for Autumn Budget 2021)

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Timing of disposal for capital gains tax
  • Date of disposal
  • Type of disposal
  • Under contract
  • Gifts
  • Transfer into trust
  • Capital distribution on a winding up
  • Capital sums derived from assets
  • Capital gains tax compliance
  • Capital gains tax UK property disposals return
  • More...

Timing of disposal for capital gains tax

Date of disposal

The date of the disposal determines the period in which the gain is subject to capital gains tax (CGT). When the rates of CGT change, the determination of the date of disposal can also affect the rate of CGT that applies to the gain.

See the Introduction to capital gains tax guidance note.

The rules for determining the date of disposal vary according to the type of disposal made.

Type of disposal

Under contract

Where an asset is disposed of and acquired under a contract, the time of the disposal and acquisition is the time when that contract is made, ie the date contracts are exchanged. It is not the date of the completion of the contract, or time of the conveyance or transfer of the asset (if different). However, if the contract is never completed, the disposal never takes place.

In the case of a conditional contract, the time of disposal and acquisition is the time when the condition is satisfied. This applies in particular to a contract that is conditional on the exercise of an option.

For guidance on oral contracts, see CG14262.

Gifts

A gift is treated as having been made when the donor has done everything within their power to effectively transfer the property to the donee.

However, other legal principles may override this. For example, a gift of land must be evidenced in writing, so the disposal date is the date of exchange of the written contracts.

Where the gift consists of company shares,

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