Law

Taxation of Chargeable Gains Act 1992

United Kingdom · statute

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In force since 2026-04-06, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 804 provisions
  1. Title and introductory text
  2. 1 Capital gains tax
  3. 1A Territorial scope
  4. 1B Non-UK residents: UK branch or agency
  5. 1C Non-UK residents: disposing of an “interest in UK land”
  6. 1D Non-UK residents: assets deriving 75% of value from UK land etc
  7. 1E Losses deductible only when within scope of tax etc
  8. 1F Allowable losses to be used in most beneficial way etc
  9. 1G Gains accruing to UK resident individuals in split years
  10. 1H The main rates of CGT
  11. 1I Income taxed at higher rates or gains exceeding unused basic rate band
  12. 1J Section 1I: definitions and other supplementary provision
  13. 1K Annual exempt amount
  14. 1L Increasing annual exempt amount to reflect increases in CPI
  15. 1M Temporary non-residents
  16. 1N Section 1M(1): assets acquired in temporary period of non-residence
  17. 1O Definitions used in Chapter
  18. 2 Corporation tax on chargeable gains
  19. 2A Company's total profits to include chargeable gains
  20. 2B Territorial scope of charge to corporation tax on chargeable gains
  21. 2C Non-UK resident company with UK permanent establishment
  22. 2D Application of CGT principles in calculating gains and losses
  23. 2E References to income tax or Income Tax Acts in case of companies
  24. 2F Interaction of capital gains tax and corporation tax
  25. 2G Assets of a company vested in a liquidator
  26. 3 Gains attributed to UK resident individuals etc
  27. 3A Gains connected to avoidance or foreign activities etc
  28. 3B Participators and their interests
  29. 3C Prevention of double UK taxation
  30. 3D Individuals who were non-UK domiciled
  31. 3E Temporary non-residents
  32. 3F Non-resident groups of companies
  33. 3G Supplementary provisions
  34. 4 Rates of capital gains tax
  35. 4A Section 4: special cases
  36. 4B Deduction of losses etc in most beneficial way
  37. 4BA Rates, and use of unused basic rate band, in certain cases
  38. 4BB Residential property gain or loss
  39. 5 Accumulation and discretionary settlements.
  40. 6 Other special cases.
  41. 7 Time for payment of tax.
  42. 8 Company’s total profits to include chargeable gains.
  43. 9 Residence, including temporary residence.
  44. 10 Non-resident with United Kingdom branch or agency.
  45. 10A Temporary non-residents.
  46. 10AA Section 10A: supplementary
  47. 10B Non-resident company with United Kingdom permanent establishment
  48. 11 Visiting forces and official agents
  49. 12 Non-UK domiciled individuals to whom remittance basis applies
  50. 13 Attribution of gains to members of non-resident companies.
  51. 13A Section 13(5): interpretation
  52. 14 Non-resident groups of companies.
  53. 14A Section 13: non-UK domiciled individuals
  54. 14B Meaning of “non-resident CGT disposal”
  55. 14C Meaning of “disposal of a UK residential property interest”
  56. 14D Persons chargeable to capital gains tax on NRCGT gains
  57. 14E Further provision about use of NRCGT losses
  58. 14F Persons not chargeable under section 14D if a claim is made
  59. 14G Section 14F: divided companies
  60. 14H Section 14F: arrangements for avoiding tax
  61. 15 Computation of gains.
  62. 16 Computation of losses.
  63. 16ZA Losses: non-UK domiciled individuals
  64. 16ZB Individual who has made election under section 16ZA: foreign chargeable gains remitted in tax year after tax year in which accrue
  65. 16ZC Individual who has made election under section 16ZA and to whom remittance basis applies
  66. 16ZD Section 16ZC: supplementary
  67. 16A Restrictions on allowable losses
  68. 17 Disposals and acquisitions treated as made at market value.
  69. 18 Transactions between connected persons.
  70. 19 Deemed consideration in certain cases where assets disposed of in a series of transactions.
  71. 20 Original market value and aggregate market value for purposes of section 19.
  72. 21 Assets and disposals.
  73. 22 Disposal where capital sums derived from assets.
  74. 23 Receipt of compensation and insurance money not treated as a disposal.
  75. 24 Disposals where assets lost or destroyed, or become of negligible value.
  76. 24A Structures and buildings contributions allowances: destruction of asset
  77. 25 Non-residents: deemed disposals.
  78. 25ZA Postponing gain or loss under section 25(3): interests in UK land
  79. 25A Long funding leases of plant or machinery: deemed disposals
  80. 26 Mortgages and charges not to be treated as disposals.
  81. 26A Transfers in respect of dormant assets
  82. 27 Disposals in cases of hire-purchase and similar transactions.
  83. 28 Time of disposal and acquisition where asset disposed of under contract.
  84. 28A Contracts completed after ordinary notification period
  85. 29 General provisions.
  86. 30 Tax-free benefits.
  87. 31 Disposal of shares or securities by a company
  88. 31A Asset-holding company leaving the group.
  89. 32 Disposals within a group followed by a disposal of shares.
  90. 33 Provisions supplementary to sections 30 to 32.
  91. 33A Modification of sections 30 to 33 in relation to chargeable intangible asset
  92. 34 Transactions treated as a reorganisation of share capital.
  93. 35 Assets held on 31st March 1982 (including assets held on 6th April 1965).
  94. 35A Disposal of asset acquired on no gain/no loss disposal
  95. 36 Deferred charges on gains before 31st March 1982.
  96. 36A Re-basing in relation to direct or indirect disposals of UK land
  97. 37 Consideration chargeable to tax on income.
  98. 37A Consideration on disposal of certain leases
  99. 37B Consideration on certain disposals: structures and buildings allowances
  100. 38 Acquisition and disposal costs etc.
  101. 39 Exclusion of expenditure by reference to tax on income.
  102. 39A Exclusion of certain expenditure: structures and buildings allowances
  103. 40 Interest charged to capital.
  104. 41 Restriction of losses by reference to capital allowances and renewals allowances.
  105. 41A Restriction of losses: long funding leases of plant or machinery
  106. 42 Part disposals.
  107. 43 Assets derived from other assets.
  108. 44 Meaning of “wasting asset".
  109. 45 Exemption for certain wasting assets.
  110. 46 Straightline restriction of allowable expenditure.
  111. 47 Wasting assets qualifying for capital allowances.
  112. 47A Exemption for certain disposals under, or after leaving, cash basis
  113. 47B Disposals made by persons after leaving cash basis
  114. 48 Consideration due after time of disposal.
  115. 48A Unascertainable consideration
  116. 49 Contingent liabilities.
  117. 50 Expenditure reimbursed out of public money.
  118. 51 Exemption for winnings and damages etc.
  119. 52 Supplemental.
  120. 52A Chapter to apply only for corporation tax purposes
  121. 53 The indexation allowance and interpretative provisions.
  122. 54 Calculation of indexation allowance.
  123. 55 Assets owned on 31st March 1982 or acquired on a no gain/no loss disposal.
  124. 56 Part disposals and disposals on a no-gain/no-loss basis.
  125. 57 Receipts etc. which are not treated as disposals but affect relevant allowable expenditure.
  126. 58 Spouses and civil partners.
  127. 59 Partnerships.
  128. 59A Limited liability partnerships.
  129. 59AA Limited liability partnerships: deemed disposal
  130. 59B Alternative investment fund managers (1)
  131. 59C Alternative investment managers (2)
  132. 60 Nominees and bare trustees.
  133. 61 Funds in court.
  134. 62 Death: general provisions.
  135. 63 Death: application of law in Scotland.
  136. 63A Death: application of law in Northern Ireland
  137. 64 Expenses in administration of estates and trusts.
  138. 65 Liability for tax of trustees or personal representatives.
  139. 66 Insolvents’ assets.
  140. 67 Provisions applicable where section 79 of the Finance Act 1980 has applied.
  141. 68 Meaning of “settled property".
  142. 68A Meaning of “settlor”
  143. 68B Transfer between settlements: identification of settlor
  144. 68C Variation of will or intestacy, etc: identification of settlor
  145. 69 Trustees of settlements.
  146. 69A Sub-fund settlements
  147. 70 Transfers into settlement.
  148. 71 Person becoming absolutely entitled to settled property.
  149. 72 Termination of life interest on death of person entitled.
  150. 73 Death of life tenant: exclusion of chargeable gain.
  151. 74 Effect on sections 72 and 73 of relief under section 165 or 260.
  152. 75 Death of annuitant.
  153. 76 Disposal of interests in settled property.
  154. 76A Disposal of interest in settled property: deemed disposal of underlying assets.
  155. 76B Transfers of value by trustees linked with trustee borrowing.
  156. 77 Charge on settlor with interest in settlement.
  157. 78 Right of recovery.
  158. 79 Provisions supplemental to sections 77 and 78.
  159. 79A Restriction on set-off of trust losses.
  160. 79B Attribution to trustees of gains of non-resident companies.
  161. 80 Trustees ceasing to be resident in U.K.
  162. 80A Postponing gain or loss under section 80(2): interests in UK land
  163. 81 Death of trustee: special rules.
  164. 82 Past trustees: liability for tax.
  165. 83 Trustees ceasing to be liable to U.K. tax.
  166. 83A Trustees both resident and non-resident in a year of assessment
  167. 84 Acquisition by dual resident trustees.
  168. 85 Disposal of interests in non-resident settlements.
  169. 85A Transfers of value: attribution of gains to beneficiaries and treatment of losses
  170. 86 Attribution of gains to settlors with interest in non-resident or dual resident settlements.
  171. 86A Attribution of gains to settlor where temporarily non-resident
  172. 87 Non-UK resident settlements: attribution of gains to beneficiaries
  173. 87A Section 87: matching
  174. 87B Section 87: remittance basis
  175. 87BA Sections 87 and 87A: disregard of capital payments made from carried interest gains
  176. 87C Sections 87 and 87A: disregard of certain capital payments
  177. 87D Sections 87 and 87A: disregard of capital payments to non-residents
  178. 87E Sections 87 and 87A: disregarded payments to temporary non-resident
  179. 87F Sections 87 and 87A: disregarded payments in year settlement ends
  180. 87G Settlor liable if capital payment received by close family member
  181. 87H Meaning of “close member of the settlor's family”
  182. 87HA Onward gifts from non-residents or qualifying new residents
  183. 87I Non-UK resident settlements: recipients of onward gifts
  184. 87J Relevant parts of payment from which onward gift derived
  185. 87K Attribution of gains or payments to recipient of onward gift
  186. 87L Cases where settlor liable following onward gift
  187. 87M Cases where recipient of onward gift is user of remittance basis
  188. 87N Sections 87 and 87A: disregard of payments to migrating beneficiary
  189. 87P Sections 87 and 87A: temporary migration after payment disregarded
  190. 88 Gains of dual resident settlements.
  191. 89 Migrant settlements etc.
  192. 90 Sections 87 and 89(2): transfers between settlements
  193. 90A Section 90: transfers made for consideration in money or money's worth
  194. 91 Increase in tax payable under section 87 or 89(2).
  195. 92 Qualifying amounts and matching.
  196. 93 Matching: special cases.
  197. 94 Transfers of settled property where qualifying amounts not wholly matched.
  198. 95 Matching after transfer.
  199. 96 Payments by and to companies.
  200. 97 Supplementary provisions.
  201. 97A Value of benefit conferred by capital payment made by way of loan
  202. 97B Value of benefit conferred by capital payment made by way of making movable property available
  203. 97C Value of benefit conferred by capital payment made by way of making land available
  204. 98 Power to obtain information for purposes of sections 87 to 90.
  205. 98A Settlements with foreign element: information.
  206. 99 Application of Act to unit trust schemes.
  207. 99A Treatment of umbrella schemes
  208. 99B Calculation of the disposal cost of accumulation units
  209. 100 Exemption for authorised unit trusts etc.
  210. 100A Exemption for certain EEA UCITS
  211. 101 Transfer of company’s assets to investment trust.
  212. 101A Transfer within group to investment trust.
  213. 101B Transfer of company’s assets to venture capital trust.
  214. 101C Transfer within group to venture capital trust.
  215. 102 Collective investment schemes with property divided into separate parts.
  216. 103 Restriction on availability of indexation allowance.
  217. 103A Application of Act to certain offshore funds
  218. 103B Application of section 99B to transparent funds
  219. 103C Power to make regulations about collective investment schemes
  220. 103D Application of Act to tax transparent funds
  221. 103DA Tax transparent funds: share pooling etc
  222. 103DB UK property rich collective investment vehicles etc
  223. 103DC Co-ownership schemes which are to be treated as partnerships
  224. 103E Application of Chapter
  225. 103F Exchanges of units for units in the same scheme
  226. 103G Exchange of units for those in another collective investment scheme
  227. 103H Scheme of reconstruction involving issue of units
  228. 103I Scheme of reconstruction involving conversion scheme
  229. 103J Supplementary provisions
  230. 103K Restriction on application of sections 103G, 103H and 103I : anti-avoidance
  231. 103KA Carried interest
  232. 103KB Carried interest: consideration on disposal etc of right
  233. 103KC Carried interest: foreign chargeable gains
  234. 103KD Carried interest: anti-avoidance
  235. 103KE Carried interest: avoidance of double taxation
  236. 103KF Relief for external investors on disposal of partnership asset
  237. 103KFA Election for carried interest gains to be chargeable as scheme profits arise
  238. 103KFB Election in relation to scheme to apply to associated schemes
  239. 103KFC Interaction with other charges
  240. 103KFD Deemed accrual of loss where carried interest never arises
  241. 103KFE Anti-avoidance
  242. 103KG Meaning of “arise” in Chapter 5
  243. 103KH Interpretation of Chapter 5
  244. 104 Share pooling: general interpretative provisions.
  245. 105 Disposal on or before day of acquisition of shares and other unidentified assets.
  246. 105A Shares acquired on same day: election for alternative treatment
  247. 105B Provision supplementary to section 105A
  248. 106 Disposal of shares and securities by company within prescribed period of acquisition.
  249. 106A Identification of securities: ... capital gains tax.
  250. 107 Identification of securities etc: general rules for corporation tax.
  251. 108 Identification of relevant securities for corporation tax.
  252. 109 Corporation tax: pre-April 1982 share pools.
  253. 110 Indexation for section 104 holdings for corporation tax.
  254. 110A Indexation for section 104 holdings: capital gains tax.
  255. 111 Indexation: building society etc. shares.
  256. 112 Parallel pooling regulations: corporation tax.
  257. 113 Calls on shares: corporation tax.
  258. 114 Consideration for options: corporation tax.
  259. 115 Exemptions for gilt-edged securities and qualifying corporate bonds etc.
  260. 116 Reorganisations, conversions and reconstructions.
  261. 116A Holding beginning or ceasing to fall within section 490 of CTA 2009
  262. 116B Shares beginning or ceasing to be shares to which section 521B of CTA 2009 applies
  263. 117 Meaning of “qualifying corporate bond".
  264. 117A Assets that are not qualifying corporate bonds for corporation tax purposes.
  265. 117B Holdings in unit trusts and offshore funds excluded from treatment as qualifying corporate bonds.
  266. 118 Amount to be treated as consideration on disposal of deep discount securities etc.
  267. 119 Transfers of securities subject to the accrued income scheme.
  268. 119A Increase in expenditure by reference to tax charged in relation to employment-related securities
  269. 119B Section 119A: unchargeable, and unremitted chargeable, foreign securities income
  270. 119C Section 119A: unremitted Part 7A income
  271. 120 Increase in expenditure by reference to tax charged in relation to shares etc.
  272. 121 Exemption for government non-marketable securities.
  273. 122 Distribution which is not a new holding within Chapter II.
  274. 123 Disposal of right to acquire shares or debentures.
  275. 124 Disposal of shares: relief in respect of income tax consequent on shortfall in distributions.
  276. 125 Shares in close company transferring assets at an undervalue.
  277. 125A Effect of share loss relief
  278. 126 Application of sections 127 to 131.
  279. 127 Equation of original shares and new holding.
  280. 128 Consideration given or received by holder.
  281. 129 Part disposal of new holding.
  282. 130 Composite new holdings.
  283. 131 Indexation allowance.
  284. 132 Equation of converted securities and new holding.
  285. 133 Premiums on conversion of securities.
  286. 134 Compensation stock.
  287. 135 Exchange of securities for those in another company
  288. 136 Scheme of reconstruction involving issue of securities
  289. 137 Restriction on application of sections 135 and 136 : anti-avoidance.
  290. 138 Procedure for clearance in advance.
  291. 138ZA Share exchanges involving non-UK incorporated close companies
  292. 138ZB Treatment of securities connected with such exchanges
  293. 138ZC Election to disapply section 135 or 136
  294. 138A Use of earn-out rights for exchange of securities.
  295. 139 Reconstruction ... involving transfer of business.
  296. 140 Postponement of charge on transfer of assets to non-resident company.
  297. 140A Transfer or division of UK business
  298. 140B Section 140A: anti-avoidance.
  299. 140C Transfer or division of non-UK business
  300. 140D Section 140C: anti-avoidance.
  301. 140DA Securities issued on division of business
  302. 140E Merger leaving assets within UK tax charge
  303. 140F Merger: assets outside UK tax charge
  304. 140G Treatment of securities issued on merger
  305. 140GA Disapplication of sections 24 and 122 where subsidiary merges with its parent
  306. 140H Share exchanges
  307. 140I Division of business or transfer of assets
  308. 140J Mergers
  309. 140K Transparent entities: taxation after merger, &c
  310. 140L Interpretation
  311. 142 Capital gains on stock dividends.
  312. 142A REITs: chargeable gains on stock dividends
  313. 143 Commodity and financial futures and qualifying options.
  314. 144 Options and forfeited deposits.
  315. 144ZA Application of market value rule in case of exercise of option
  316. 144ZB Exception to rule in section 144ZA
  317. 144ZC Section 144ZB: non-commercial exercise of option
  318. 144ZD Section 144ZB: alteration of value to obtain tax advantage
  319. 144A Cash-settled options.
  320. 145 Call options: indexation allowance.
  321. 146 Options: application of rules as to wasting assets.
  322. 147 Quoted options treated as part of new holdings.
  323. 148 Traded options: closing purchases.
  324. 148A Futures and options involving guaranteed returns
  325. 148B Deemed disposals at a gain under section 564(4) of ITTOIA 2005
  326. 148C Deemed disposals at a loss under section 564(4) of ITTOIA 2005
  327. 149 Rights to acquire qualifying shares.
  328. 149A Employment-related securities options
  329. 149AA Restricted and convertible employment-related securities and employee shareholder shares
  330. 149AB Shares in research institution spin-out companies
  331. 149B Employee incentive schemes: conditional interests in shares.
  332. 149C Priority share allocations
  333. 150 Business expansion schemes.
  334. 150A Enterprise investment scheme.
  335. 150B Enterprise investment scheme: reduction of EIS relief.
  336. 150C Enterprise investment scheme: re-investment.
  337. 150D Enterprise investment scheme: application of taper relief
  338. 150E Seed enterprise investment scheme
  339. 150F Seed enterprise investment scheme: reduction of relief
  340. 150G Seed enterprise investment scheme: re-investment
  341. 151 Personal equity plans.
  342. 151A Venture capital trusts: reliefs.
  343. 151B Venture capital trusts: supplementary.
  344. 151BA CITR: identification of securities or shares on a disposal
  345. 151BB CITR: rights issues etc
  346. 151BC CITR: company reconstructions etc
  347. 151C Strips: manipulation of price: associated payment giving rise to loss
  348. 151D Corporate strips: manipulation of price: associated payment giving rise to loss
  349. 151E Exchange gains and losses from loan relationships: regulations
  350. 151F Treatment of alternative finance arrangements
  351. 151G Regulations where non-qualifying shares conditions altered
  352. 151H Introduction
  353. 151I Meaning of “financial institution”
  354. 151J Purchase and resale arrangements
  355. 151K Diminishing shared ownership arrangements : initial acquisition
  356. 151KA Diminishing shared ownership arrangements: refinancing
  357. 151L Deposit arrangements
  358. 151M Profit share agency arrangements
  359. 151N Investment bond arrangements
  360. 151O Provision not at arm's length: exclusion of arrangements from sections 151J to 151N
  361. 151P Purchase and resale arrangements
  362. 151Q Purchase and resale arrangements where return in foreign currency
  363. 151R Diminishing shared ownership arrangements
  364. 151S Other arrangements
  365. 151T Investment bond arrangements are qualifying corporate bonds
  366. 151U Treatment of bond-holder and bond-issuer
  367. 151V Treatment as securities
  368. 151W Investment bond arrangements not unit trust scheme or offshore fund
  369. 151X Exclusion of some alternative finance return from sale consideration
  370. 151Y Diminishing shared ownership arrangements : further provision
  371. 151Z Diminishing shared ownership arrangements: further provision in respect of refinancing
  372. 152 Roll-over relief.
  373. 153 Assets only partly replaced.
  374. 153A Provisional application of sections 152 and 153.
  375. 154 New assets which are depreciating assets.
  376. 155 Relevant classes of assets.
  377. 156 Assets of Class 1.
  378. 156ZA Intangible fixed assets: roll-over relief
  379. 156ZB Intangible fixed assets: interaction with relief under Chapter 7 of Part 8 of CTA 2009
  380. 156A Cessation of trade by limited liability partnership.
  381. 157 Trade carried on by family company: business assets dealt with by individual.
  382. 158 Activities other than trades, and interpretation.
  383. 159 Non-residents: roll-over relief.
  384. 159A Disposals of interests in UK land by non-residents: roll-over relief
  385. 160 Dual resident companies: roll-over relief.
  386. 161 Appropriations to and from stock.
  387. 162 Roll-over relief on transfer of business.
  388. 162A Election for section 162 not to apply
  389. 162B Disincorporation relief: assets (including pre-FA 2002 goodwill)
  390. 162C Disincorporation relief: post-FA 2002 goodwill
  391. 163 Relief for disposals by individuals on retirement from family business.
  392. 164 Other retirement relief.
  393. 164A Relief on re-investment for individuals.
  394. 164B Roll-over relief on re-investment by trustees.
  395. 164BA Interaction with retirement relief
  396. 164C Restriction applying to retirement relief and roll-over relief on re-investment.
  397. 164D Relief carried forward into replacement shares.
  398. 164E Application of Chapter in cases of an exchange of shares.
  399. 164F Failure of conditions of relief.
  400. 164FA Loss of relief in cases where shares acquired on being issued.
  401. 164FF Qualifying investment acquired from husband or wife.
  402. 164FG Multiple claims.
  403. 164G Meaning of “qualifying company".
  404. 164H Property companies etc. not to be qualifying companies.
  405. 164I Qualifying trades.
  406. 164J Provisions supplementary to section 164I.
  407. 164K Foreign residents.
  408. 164L Anti-avoidance provisions.
  409. 164M Exclusion of double relief.
  410. 164MA Exclusion of double relief
  411. 164N Interpretation of Chapter IA.
  412. 165 Relief for gifts of business assets.
  413. 165A Meaning of “holding company”, “trading company” and “trading group”
  414. 166 Gifts to non-residents.
  415. 167 Gifts to foreign-controlled companies.
  416. 167A Gifts of direct or indirect interests in UK land to non-residents
  417. 168 Emigration of donee.
  418. 168A Postponing held-over gain: interests in UK land
  419. 169 Gifts into dual resident trusts.
  420. 169A Cessation of trade by limited liability partnership
  421. 169B Gifts to settlor-interested settlements etc
  422. 169C Clawback of relief if settlement becomes settlor-interested etc
  423. 169D Exceptions to sections 169B and 169C
  424. 169E Meaning of “settlor” in sections 169B to 169D and 169G
  425. 169F Meaning of “interest in a settlement” in sections 169B to 169D
  426. 169G Meaning of “arrangement” in sections 169B to 169E and information power
  427. 169H Introduction
  428. 169I Material disposal of business assets
  429. 169J Disposal of trust business assets
  430. 169K Disposal associated with relevant material disposal
  431. 169L Relevant business assets
  432. 169LA Relevant business assets: goodwill transferred to a close company
  433. 169M Relief to be claimed
  434. 169N Amount of relief: general
  435. 169O Amount of relief: special provisions for certain trust disposals
  436. 169P Amount of relief: special provision for certain associated disposals
  437. 169Q Reorganisations: disapplication of section 127
  438. 169R Reorganisations involving acquisition of qualifying corporate bonds
  439. 169S Interpretation of Chapter
  440. 169SA Meaning of “trading company” and “trading group”
  441. 169SB Overview of Chapter
  442. 169SC Election by individual where company ceases to be personal company
  443. 169SD Supplementary election to defer gains until subsequent disposal
  444. 169SE Application of section 169SD where section 116 applies
  445. 169SF Application of section 169SD where sections 127 to 130 apply
  446. 169SG Elections under sections 169SC and 169SD
  447. 169SH Claims for relief in respect of subsequent disposals
  448. 169T Overview of Chapter
  449. 169U Eligibility conditions for deferred business asset disposal relief
  450. 169V Operation of deferred business asset disposal relief
  451. 169VA Overview of Chapter
  452. 169VB Qualifying shares, potentially qualifying shares and excluded shares
  453. 169VC Investors' relief
  454. 169VD Disposal where holding consists partly of qualifying shares
  455. 169VE Which shares are in holding immediately before disposal
  456. 169VF Shares treated as disposed of in previous disposal where claim made
  457. 169VG Shares treated as disposed of in previous disposal: no claim made
  458. 169VH Disposals by trustees: further conditions for relief
  459. 169VI Disposals by trustees: relief reduced in certain cases
  460. 169VJ Disposals of interests in shares: joint holdings etc
  461. 169VK Cap on relief for disposal by an individual
  462. 169VL Cap on relief for disposal by trustees of a settlement
  463. 169VM Claims for relief
  464. 169VN Reorganisations where no consideration given
  465. 169VO The appropriate number
  466. 169VP Reorganisations where consideration given
  467. 169VQ Exchange of shares for those in another company
  468. 169VR New shares issued on scheme of reconstruction
  469. 169VS Modification of conditions for being a qualifying share
  470. 169VT Election to disapply section 127
  471. 169VU “Subscribe” etc
  472. 169VV “Trading company” etc
  473. 169VW “Relevant employee”
  474. 169VX “Unremunerated director”
  475. 169VY General definitions
  476. 170 Interpretation of sections 171 to 181.
  477. 171 Transfers within a group: general provisions.
  478. 171A Election to reallocate gain or loss to another member of the group
  479. 171B Election under section 171A: effect
  480. 171C Elections under section 171A: insurance companies
  481. 172 Transfer of United Kingdom branch or agency.
  482. 173 Transfers within a group: trading stock.
  483. 174 Disposal or acquisition outside a group.
  484. 175 Replacement of business assets by members of a group.
  485. 176 Depreciatory transactions within a group.
  486. 177 Dividend stripping.
  487. 177A Restriction on set-off of pre-entry losses.
  488. 177B Restrictions on setting losses against pre-entry gains.
  489. 178 Company ceasing to be member of group: pre-appointed day cases.
  490. 179 Company ceasing to be member of group: post-appointed day cases.
  491. 179ZA Claim for adjustment of calculations under section 179
  492. 179A Reallocation within group of gain or loss accruing under section 179
  493. 179B Roll-over of degrouping charge on business assets
  494. 180 Transitional provisions.
  495. 181 Exemption from charge under 178 or 179 in the case of certain mergers.
  496. 182 Disposals of debts.
  497. 183 Disposals of shares.
  498. 184 Definitions and other provisions supplemental to sections 182 and 183.
  499. 184A Restrictions on buying losses: tax avoidance schemes
  500. 184B Restrictions on buying gains: tax avoidance schemes
  501. 184C Sections 184A and 184B: meaning of “qualifying change of ownership”
  502. 184D Sections 184A and 184B: meaning of “tax advantage”
  503. 184E Sections 184A and 184B: “pre-change assets”: basic rules
  504. 184F Sections 184A and 184B: “pre-change assets”: pooling rules
  505. 184G Avoidance involving losses: schemes converting income to capital
  506. 184H Avoidance involving losses: schemes securing deductions
  507. 184I Notices under sections 184G and 184H
  508. 184J Asset subject to EU exit charge on becoming chargeable asset
  509. 185 Deemed disposal of assets on company ceasing to be resident in U.K.
  510. 186 Deemed disposal of assets on company ceasing to be liable to U.K. taxation.
  511. 187 Postponement of charge on deemed disposal under section 185 or 186.
  512. 187A Deemed disposal under section 185: ATED-related gains and losses
  513. 187B Postponing gain or loss under section 185(2): interests in UK land
  514. 188 Dual resident companies: deemed disposal of certain assets.
  515. 188A Election for pooling
  516. 188B Meaning of “NRCGT group”
  517. 188C Transfers within an NRCGT group
  518. 188D Person chargeable to capital gains tax on NRCGT gains accruing to members of an NRCGT group
  519. 188E Further provision about group losses
  520. 188F Companies becoming eligible to join an NRCGT group
  521. 188G Company ceasing to be a member of an NRCGT group
  522. 188H The responsible members of an NRCGT group
  523. 188I Joint and several liability of responsible members
  524. 188J The representative company of an NRCGT group
  525. 188K Interpretation of sections 188A to 188J
  526. 189 Capital distribution of chargeable gains: recovery of tax from shareholder.
  527. 190 Tax recoverable from another group company or controlling director.
  528. 192 Tax exempt distributions.
  529. 192A Exemptions for gains or losses on disposal of shares etc
  530. 193 Roll-over relief not available for gains on oil licences.
  531. 194 Disposals of oil licences relating to undeveloped areas.
  532. 195 Allowance of certain drilling expenditure etc.
  533. 195A Oil licence swaps
  534. 195B Licence-consideration swap
  535. 195C Company that receives mixed consideration: N exceeds C
  536. 195D Company that receives mixed consideration: N does not exceed C
  537. 195E Company that gives mixed consideration
  538. 195F Reimbursed expenditure
  539. 196 Interpretation of sections 194 to 195F .
  540. 197 Disposals of interests in oil fields etc: ring fence provisions.
  541. 198 Replacement of business assets used in connection with oil fields.
  542. 198A Ring fence reinvestment: whole consideration reinvested
  543. 198B Ring fence reinvestment: part of consideration reinvested
  544. 198C Provisional application of sections 198A and 198B
  545. 198D No double claims
  546. 198E Ring fence reinvestments and disposal consideration
  547. 198F Qualification for roll-over relief
  548. 198G Qualification for section 153 relief
  549. 198H Acquisition by member of same group
  550. 198I Exploration, appraisal and development expenditure
  551. 198J Oil and gas: reinvestment after pre-trading disposal
  552. 198K Provisional application of section 198J
  553. 198L Expenditure by member of same group
  554. 199 Exploration or exploitation assets: deemed disposals
  555. 200 Limitation of losses on disposal of oil industry assets held on 31st March 1982.
  556. 201 Royalties.
  557. 202 Capital losses.
  558. 203 Provisions supplementary to section 202 .
  559. 204 Policies of insurance and non-deferred annuities
  560. 205 Disallowance of insurance premiums as expenses.
  561. 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  562. 207 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  563. 208 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  564. 209 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  565. 210 Life assurance and deferred annuities.
  566. 210A Ring-fencing of losses
  567. 210B Disposal and acquisition of section 119 or 120 securities
  568. 210C Losses on disposal of authorised investment fund assets to connected manager
  569. 211 Transfers of business.
  570. 211ZA Transfers of business: transfer of unused losses
  571. 211A Gains of insurance company from venture capital investment partnership
  572. 211B Transfers of assets to certain collective investment schemes
  573. 212 Annual deemed disposal of holdings of unit trusts etc.
  574. 213 Spreading of gains and losses under section 212.
  575. 213A Power to modify ss. 212 and 213 etc in case of CFCs that are offshore funds
  576. 214 Transitional provisions.
  577. 214A Further transitional provisions.
  578. 214B Modification of Act in relation to overseas life insurance companies.
  579. 214BA Interpretation
  580. 214C Gains not eligible for taper relief.
  581. 215 Disposal of assets on amalgamation of building societies etc.
  582. 216 Assets transferred from society to company.
  583. 217 Shares, and rights to shares, in successor company.
  584. 217A Transfer of assets on incorporation of registered friendly society.
  585. 217B Rights of members in registered society equated with rights in incorporated society.
  586. 217C Subsequent disposal of assets by incorporated society etc.
  587. 217D Disposal of assets on union, amalgamation or transfer of engagements
  588. 218 Disposals of land between the Regulator of Social Housing, the Secretary of State or Scottish Homes and housing associations.
  589. 219 Disposals by housing related bodies.
  590. 220 Disposals by Northern Ireland housing associations.
  591. 221 Harbour authorities.
  592. 222 Relief on disposal of private residence.
  593. 222A Determination of main residence: non-resident CGT disposals
  594. 222B Non-qualifying tax years
  595. 222C Day count test
  596. 223 Amount of relief.
  597. 223ZA Amount of relief: individual’s residency delayed by certain events
  598. 223A Amount of relief: non-resident CGT disposals
  599. 223B Additional relief: part of private residence let out
  600. 224 Relief under sections 223 and 223B: further provisions.
  601. 225 Private residence occupied under terms of settlement.
  602. 225A Private residence held by personal representatives
  603. 225B Disposals in connection with divorce, etc
  604. 225BA Deferred payments on disposals in connection with divorce etc
  605. 225C Sale of private residence under certain agreements with employer, etc
  606. 225D Private residence of adult placement carer
  607. 225E Disposals by disabled persons or persons in care homes etc
  608. 226 Private residence occupied by dependent relative before 6th April 1988.
  609. 226A Private residence relief: cases where relief obtained under section 260
  610. 226B Exception to section 226A
  611. 227 Conditions for roll-over relief.
  612. 228 Conditions for relief: supplementary.
  613. 229 The relief.
  614. 230 Dwelling-houses: special provision.
  615. 231 Shares: special provision.
  616. 232 Chargeable event when replacement assets owned.
  617. 233 Chargeable event when replacement property owned.
  618. 234 Chargeable events when bonds owned.
  619. 235 Information.
  620. 236 Prevention of double charge.
  621. 236A Relief for transfers to share incentive plans
  622. 236B Exemption for employee shareholder shares
  623. 236C Only first £50,000 of shares under associated agreements to be exempt
  624. 236D Shares not exempt if shareholder or connected person has material interest in company
  625. 236E Identification of exempt employee shareholder shares
  626. 236F Reorganisation of share capital involving employee shareholder shares
  627. 236G Relinquishment of employment rights is not disposal of an asset
  628. 236H Disposals to employee-ownership trusts
  629. 236I Trading requirement
  630. 236J All-employee benefit requirement
  631. 236K Further provision about the equality requirement
  632. 236L Cases in which all-employee benefit requirement treated as met
  633. 236LA Trustee independence requirement
  634. 236M Controlling interest requirement
  635. 236N Limited participation requirement
  636. 236O No section 236H relief if disqualifying event in next four tax years
  637. 236P Events which trigger deemed disposal and reacquisition by trustees
  638. 236Q Relief for deemed disposals under section 71
  639. 236R No section 236Q relief if disqualifying event in next four tax years
  640. 236S Identification of shares where section 236H or 236Q applies
  641. 236T Further provision about significant and controlling interests
  642. 236U Interpretation of sections 236H to 236U
  643. 237 Superannuation funds, annuities and annual payments.
  644. 237A Share option schemes: release and replacement of options.
  645. 238 Approved profit sharing and share option schemes.
  646. 238A ... Share schemes and share incentives
  647. 239 Disposals to trustees of employee trusts
  648. 239ZA Relief for disposals by trustees of employee trusts
  649. 239A De-registration of registered pension schemes
  650. 240 Leases of land and other assets.
  651. 241 UK furnished holiday lettings.
  652. 241A EEA furnished holiday lettings
  653. 242 Small part disposals.
  654. 243 Part disposal to authority with compulsory powers.
  655. 244 Part disposal: consideration exceeding allowable expenditure.
  656. 245 Compensation paid on compulsory acquisition.
  657. 246 Time of disposal and acquisition.
  658. 247 Roll-over relief on compulsory acquisition.
  659. 247A Provisional application of section 247.
  660. 248 Provisions supplementary to section 247.
  661. 248A Roll-over relief on disposal of joint interests in land: conditions
  662. 248B Calculation of relief
  663. 248C Excluded land
  664. 248D Milk quotas
  665. 248E Relief on disposal of joint interests in private residence
  666. 249 Grants for giving up agricultural land.
  667. 250 Woodlands.
  668. 251 General provisions.
  669. 252 Foreign currency bank accounts.
  670. 252A Foreign currency bank accounts and the remittance basis
  671. 253 Relief for loans to traders.
  672. 254 Relief for debts on qualifying corporate bonds.
  673. 255 Provisions supplementary to section 254.
  674. 255A Hold-over relief for gains re-invested in social enterprises
  675. 255B Gains and losses on investments in social enterprises
  676. 255C Application of section 255B(2) where maximum SI relief not obtained
  677. 255D Application of section 255B(2) where SI relief has been reduced
  678. 255E Reorganisations involving shares to which SI relief is attributable
  679. 256 Charities.
  680. 256A Attributing gains to the non-exempt amount: charitable trusts
  681. 256B How gains are attributed to the non-exempt amount: charitable trusts
  682. 256C Attributing gains to the non-exempt amount: charitable companies
  683. 256D How gains are attributed to the non-exempt amount: charitable companies
  684. 257 Gifts to charities etc.
  685. 257A Tainted charity donations
  686. 257B Associated donations in relation to tainted charity donations
  687. 258 Works of art etc.
  688. 259 Gifts to housing associations.
  689. 260 Gifts on which inheritance tax is chargeable etc.
  690. 261 Section 260 relief: gifts to non-residents.
  691. 261ZA Gifts of direct or indirect interests in UK land to non-residents
  692. 261A Disposal of know-how as part of disposal of all or part of a trade
  693. 261B Treating trade loss etc as CGT loss
  694. 261C Meaning of “the maximum amount” for purposes of section 261B
  695. 261D Treating excess post-cessation trade or property relief as CGT loss
  696. 261E Meaning of “the maximum amount” for purposes of section 261D
  697. 261F Deemed manufactured payments: effect on repurchase price
  698. 261G Price differences under repos: effect on repurchase price
  699. 261H Power to modify section 261G in non-arm's length case
  700. 262 Chattel exemption.
  701. 263 Passenger vehicles.
  702. 263AZA Renewables obligation certificates for domestic microgeneration
  703. 263ZA Former employees: employment-related liabilities
  704. 263A Agreements for sale and repurchase of securities: capital gains tax
  705. 263AA Section 263A: interpretation
  706. 263B Stock lending arrangements.
  707. 263C Stock lending involving redemption.
  708. 263CA Stock lending: insolvency etc of borrower
  709. 263D Gains accruing to persons paying manufactured dividends
  710. 263E Structured finance arrangements
  711. 263F Power to modify repo provisions: non-standard repo cases
  712. 263G Power to modify repo provisions: redemption arrangements
  713. 263H Sections 263F and 263G: supplementary provisions
  714. 263I Powers about manufactured overseas dividends
  715. 264 Relief for local constituency associations of political parties on reorganisation of constituencies.
  716. 265 Designated international organisations.
  717. 266 Inter-American Development Bank.
  718. 267 Sharing of transmission facilities.
  719. 268 Decorations for valour or gallant conduct.
  720. 268A Victims of National-Socialist persecution
  721. 268B Compensation for deprivation of foreign assets
  722. 269 Foreign currency for personal expenditure.
  723. 270 Chevening Estate.
  724. 271 Other miscellaneous exemptions.
  725. 271ZA Visiting forces and staff of designated allied headquarters
  726. 271ZB Official agents of Commonwealth countries or Republic of Ireland etc
  727. 271A Overview of Chapter
  728. 271B Branch or agency treated as UK representative
  729. 271C Trade or profession carried on in partnership
  730. 271D Interpretation of Chapter
  731. 271E Introduction to Chapter
  732. 271F Obligations and liabilities of UK representative
  733. 271G Exceptions: notices and information
  734. 271H Exceptions: criminal offences and penalties etc
  735. 271I Indemnities
  736. 271J Meaning of “non-UK resident” and “independent agent”
  737. 272 Valuation: general.
  738. 273 Unquoted shares and securities.
  739. 274 Value determined for inheritance tax.
  740. 275 Location of assets.
  741. 275A Location of certain intangible assets
  742. 275B Section 275A: supplementary provisions
  743. 275C Location of assets: interests of co-owners
  744. 276 The territorial sea and the continental shelf.
  745. 276A No gain/no loss: foreign permanent establishment exemption
  746. 277 Double taxation relief.
  747. 278 Allowance for foreign tax.
  748. 279 Foreign assets: delayed remittances.
  749. 279A Deferred unascertainable consideration: election for treatment of loss
  750. 279B Provisions supplementary to section 279A
  751. 279C Effect of election under section 279A
  752. 279D Elections under section 279A
  753. 280 Consideration payable by instalments.
  754. 281 Payment by instalments of tax on gifts.
  755. 282 Recovery of tax from donee.
  756. 283 Repayment supplements.
  757. 284 Income tax decisions.
  758. 284A Concessions that defer a charge.
  759. 284B Provisions supplementary to section 284A.
  760. 285 Recognised investment exchanges.
  761. 285A UK Economic Interest Groupings European Economic Interest Groupings
  762. 286 Connected persons: interpretation.
  763. 286A Residence of companies
  764. 287 Orders and regulations made by the Treasury or the Board.
  765. 288 Interpretation.
  766. 289 Commencement.
  767. 290 Savings, transitionals, consequential amendments and repeals.
  768. 291 Short title.
  769. Schedule D1 Relief for new residents on foreign gains
  770. SCHEDULE 1 UK resident individuals to whom the remittance basis applied
  771. SCHEDULE 1A Assets deriving 75% of value from UK land etc
  772. SCHEDULE 1C Annual exempt amount in cases involving settled property
  773. SCHEDULE 2 Assets held on 6th April 1965
  774. SCHEDULE 3 Assets held on 31st March 1982
  775. SCHEDULE 4 Deferred charges on gains before 31st March 1982
  776. SCHEDULE 4ZA Sub-fund settlements
  777. SCHEDULE 4A Disposal of interest in settled property: deemed disposal of underlying assets
  778. SCHEDULE 4AA Re-basing for non-residents in respect of UK land etc held on 5 April 2019
  779. SCHEDULE 4B Transfers of value by trustees linked with trustee borrowing
  780. SCHEDULE 4C Transfers of value: attribution of gains to beneficiaries
  781. SCHEDULE 5 Attribution of gains to settlors with interest in non-resident or dual resident settlement
  782. SCHEDULE 5A Settlements with foreign element: information
  783. SCHEDULE 5AZA Meaning of “scheme of reconstruction”
  784. SCHEDULE 5AA Meaning of “scheme of reconstruction”
  785. SCHEDULE 5AAA UK property rich collective investment vehicles etc
  786. SCHEDULE 5B Enterprise investment scheme: re-investment
  787. SCHEDULE 5BB Seed enterprise investment scheme: re-investment
  788. SCHEDULE 5C Venture capital trusts: deferred charge on re-investment
  789. SCHEDULE 7 Relief for gifts of business assets
  790. SCHEDULE 7ZA Business asset disposal relief: “trading company” and “trading group”
  791. SCHEDULE 7ZB Investors' relief: disqualification of shares
  792. SCHEDULE 7A Restriction on set-off of pre-entry losses
  793. SCHEDULE 7AC Exemptions for disposals by companies with substantial shareholding
  794. SCHEDULE 7AD Gains of insurance company from venture capital investment partnership
  795. SCHEDULE 7C Relief for transfers to Schedule 2 share plans
  796. SCHEDULE 7D ... Share schemes and share incentives
  797. SCHEDULE 8 Leases
  798. SCHEDULE 8A
  799. SCHEDULE 8B Hold-over relief for gains re-invested in social enterprises
  800. SCHEDULE 9 Gilt-edged securities
  801. SCHEDULE 10 Consequential amendments
  802. SCHEDULE 11 Transitional provisions and savings
  803. SCHEDULE 12 Repeals
  804. schedule-n15

Proposed changes to this act

No one has proposed a change to this act yet.

804 provisions

7 Time for payment of tax.

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8 Company’s total profits to include chargeable gains.

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9 Residence, including temporary residence.

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10 Non-resident with United Kingdom branch or agency.

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10A Temporary non-residents.

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10AA Section 10A: supplementary

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10B Non-resident company with United Kingdom permanent establishment

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11 Visiting forces and official agents

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12 Non-UK domiciled individuals to whom remittance basis applies

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13 Attribution of gains to members of non-resident companies.

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13A Section 13(5): interpretation

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14 Non-resident groups of companies.

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14A Section 13: non-UK domiciled individuals

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14B Meaning of “non-resident CGT disposal”

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14C Meaning of “disposal of a UK residential property interest”

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14D Persons chargeable to capital gains tax on NRCGT gains

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14E Further provision about use of NRCGT losses

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14F Persons not chargeable under section 14D if a claim is made

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14G Section 14F: divided companies

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14H Section 14F: arrangements for avoiding tax

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15 Computation of gains.

(1) The amount of the gains accruing on the disposal of assets shall be computed in accordance with this Part, subject to the other provisions of this Act. (2) Every gain shall, except as otherwise expressly provided, be a chargeable gain.

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16 Computation of losses.

(1) Subject to sections 261B, 261D and 263ZA and except as otherwise expressly provided, the amount of a loss accruing on a disposal of an asset shall be computed in the same way as the amount of a gain accruing on a disposal is computed. (2) Except as otherwise expressly provided, all the provisions of this Act which distinguish gains which are chargeable gains from those which are not, or which make part of a gain a chargeable gain, and part not, shall apply also to distinguish losses which are allowable losses from those which are not, and to make part of a loss an allowable loss, and part not; and references in this Act to an allowable loss shall be construed accordingly. (2A) A loss accruing to a person in a year of assessment shall not be an allowable loss for the purposes of this Act unless, in relation to that year, he gives a notice to an officer of the Board quantifying the amount of that loss; and sections 42 and 43 of the Management Act shall apply in relation to such a notice as if it were a claim for relief. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3A) If the person is an individual and the year is a split year as respects that individual, subsection (3) also applies to a loss accruing to the individual in the overseas part of that year. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) A qualifying foreign loss accruing to an individual in a tax year is not an allowable loss if a foreign gain claim, a foreign income claim or a foreign employment election has effect in relation to the individual for that tax year. (5) In subsection (4), “qualifying foreign loss” has the same meaning as in Schedule D1 (see paragraph 6 of that Schedule).

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16ZA Losses: non-UK domiciled individuals

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16ZB Individual who has made election under section 16ZA: foreign chargeable gains remitted in tax year after tax year in which accrue

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16ZC Individual who has made election under section 16ZA and to whom remittance basis applies

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16ZD Section 16ZC: supplementary

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16A Restrictions on allowable losses

(1) For the purposes of this Act, “allowable loss” does not include a loss accruing to a person if— (a) it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and (b) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage. (2) For the purposes of subsection (1)— “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and “tax advantage” means— relief or increased relief from tax, repayment or increased repayment of tax, the avoidance or reduction of a charge to tax or an assessment to tax, or the avoidance of a possible assessment to tax, and for the purposes of this definition “tax” means capital gains tax, corporation tax or income tax. (3) For the purposes of subsection (1) it does not matter— (a) whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or (b) whether the tax advantage is secured for the person to whom the loss accrues or for any other person.

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17 Disposals and acquisitions treated as made at market value.

(1) Subject to the provisions of this Act, a person’s acquisition or disposal of an asset shall for the purposes of this Act be deemed to be for a consideration equal to the market value of the asset— (a) where he acquires or, as the case may be, disposes of the asset otherwise than by way of a bargain made at arm’s length, and in particular where he acquires or disposes of it by way of gift or on a transfer into settlement by a settlor or by way of distribution from a company in respect of shares in the company, or (b) where he acquires or, as the case may be, disposes of the asset wholly or partly for a consideration that cannot be valued, or in connection with his own or another’s loss of office or employment or diminution of emoluments, or otherwise in consideration for or recognition of his or another’s services or past services in any office or employment or of any other service rendered or to be rendered by him or another. (2) Subsection (1) shall not apply to the acquisition of an asset if— (a) there is no corresponding disposal of it, and (b) there is no consideration in money or money’s worth or the consideration is of an amount or value lower than the market value of the asset.

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18 Transactions between connected persons.

(1) This section shall apply where a person acquires an asset and the person making the disposal is connected with him. (2) Without prejudice to the generality of section 17(1) the person acquiring the asset and the person making the disposal shall be treated as parties to a transaction otherwise than by way of a bargain made at arm’s length. (3) Subject to subsection (4) below, if on the disposal a loss accrues to the person making the disposal, it shall not be deductible except from a chargeable gain accruing to him on some other disposal of an asset to the person acquiring the asset mentioned in subsection (1) above, being a disposal made at a time when they are connected persons. (4) Subsection (3) above shall not apply to a disposal by way of gift in settlement if the gift and the income from it is wholly or primarily applicable for educational, cultural or recreational purposes, and the persons benefiting from the application for those purposes are confined to members of an association of persons for whose benefit the gift was made, not being persons all or most of whom are connected persons. (5) Where the asset mentioned in subsection (1) above is an option to enter into a sale or other transaction given by the person making the disposal a loss accruing to the person acquiring the asset shall not be an allowable loss unless it accrues on a disposal of the option at arm’s length to a person who is not connected with him. (6) Subject to subsection (7) below, in a case where the asset mentioned in subsection (1) above is subject to any right or restriction enforceable by the person making the disposal, or by a person connected with him, then (where the amount of the consideration for the acquisition is, in accordance with subsection (2) above, deemed to be equal to the market value of the asset) that market value shall be— (a) what its market value would be if not subject to the right or restriction, minus— (b) the market value of the right or restriction or the amount by which its extinction would enhance the value of the asset to its owner, whichever is the less. (7) If the right or restriction is of such a nature that its enforcement would or might effectively destroy or substantially impair the value of the asset without bringing any countervailing advantage either to the person making the disposal or a person connected with him or is an option or other right to acquire the asset or, in the case of incorporeal property, is a right to extinguish the asset in the hands of the person giving the consideration by forfeiture or merger or otherwise, the market value of the asset shall be determined, and the amount of the gain accruing on the disposal shall be computed, as if the right or restriction did not exist. (8) Subsections (6) and (7) above shall not apply to a right of forfeiture or other right exercisable on breach of a covenant contained in a lease of land or other property, and shall not apply to any right or restriction under a mortgage or other charge. (9) If deductible clogged losses have accrued to a company, the company may make a claim in respect of an accounting period for— (a) an amount of the deductible clogged losses to be treated, for the purposes of section 2A(1)(a), as allowable losses accruing in the accounting period, and (b) the same amount of allowable losses accruing to the company in the period to be treated, for the purposes of section 2A(1)(b), as allowable losses previously accruing to the company while it was within the charge to corporation tax. (10) The amount in respect of which the claim is made may not exceed the total amount of any allowable losses accruing to the company in the accounting period for which the claim is made. (11) In subsection (9), “deductible clogged losses” means losses which would, apart from Part 7ZA of CTA 2010, be deductible under subsection (3) from chargeable gains accruing to the company in an accounting period. (12) A claim under subsection (9) must be made by being included in the company’s tax return for the accounting period for which the claim is made.

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19 Deemed consideration in certain cases where assets disposed of in a series of transactions.

(1) For the purposes of this Act, in any case where— (a) by way of 2 or more material transactions which are linked (a series of linked transactions), one person disposes of assets to another person with whom he is connected or to 2 or more other persons with each of whom he is connected, and (b) the original market value of the assets disposed of by any of the transactions in the series, as determined under section 20, is less than the appropriate portion of the aggregate market value of the assets disposed of by all the transactions in the series, as so determined, then, subject to subsection (2) below, the disposal effected by any linked transaction in the series in respect of which the condition in paragraph (b) above is fulfilled shall be deemed to be for a consideration equal to the appropriate portion referred to in that paragraph. (2) Where the disposal effected by a material transaction is one to which section 58 applies, nothing in subsection (1) above shall affect the amount which, for the purposes of this Act, is the consideration for that disposal. (3) Subject to subsection (5) below, any reference in this section to a material transaction is a reference to a transaction by way of gift or otherwise; and, for the purposes of this section, 2 or more material transactions are linked if they occur within the period of 6 years ending on the date of the last of them. (4) This section shall apply or, as the case may be, shall again apply— (a) when a second material transaction causes a series of linked transactions to come into being; and (b) whenever, on the occurrence of a further material transaction, an existing series is extended by the inclusion of that transaction (whether or not an earlier transaction ceases to form part of the series); and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to this section on each such occasion. (5) Where a member of a group of companies disposes of an asset to another member of the group in circumstances such that, by virtue of section 171, both companies are treated, so far as relates to corporation tax on chargeable gains, as if the consideration for the disposal were of such an amount as would secure that neither a gain nor a loss would accrue, the transaction by which that disposal is effected is not a material transaction; and a disposal in these circumstances is in this section referred to as an “inter-group transfer”. (6) In any case where— (a) a company (“company A”) disposes of an asset by way of a material transaction, and (b) company A acquired the asset after 19th March 1985 by way of an inter-group transfer, and (c) the disposal by company A is to a person who is connected with another company (“company B”) which at some time after 19th March 1985 disposed of the asset by way of an inter-group transfer, and (d) either the disposal by way of inter-group transfer which is referred to in paragraph (c) above was the occasion of the acquisition referred to in paragraph (b) above or, between that disposal and that acquisition, there has been no disposal of the asset which was not an inter-group transfer, then, for the purpose of determining whether subsection (1) above applies in relation to a series of linked transactions, the disposal by company A shall be treated as having been made by company B; but any increase in the consideration for that disposal resulting from the application of subsection (1) above shall have effect with respect to company A.

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20 Original market value and aggregate market value for purposes of section 19.

(1) This section has effect for determining the original market value of assets and the aggregate market value of assets as mentioned in subsection (1)(b) of section 19. (2) Expressions used in this section have the same meaning as in that section. (3) Where there is a series of linked transactions, the original market value of the assets disposed of by each transaction in the series shall be determined as follows— (a) if at the time in question the transaction is the most recent in the series, the original market value of the assets disposed of by that transaction is the market value which, apart from section 19, would be deemed to be the consideration for that transaction for the purposes of this Act; and (b) in the case of any other transaction in the series, the original market value of the assets disposed of by that transaction is the value which, prior to the occurrence of the most recent transaction in the series, was or would have been deemed for the purposes of this Act to be the consideration for the transaction concerned (whether by virtue of the previous operation of section 19, or by virtue of any other provision of this Act). (4) Subject to subsections (6) to (9) below, in relation to any transaction in a series of linked transactions— (a) any reference in this section or section 19 to the aggregate market value of the assets disposed of by all the transactions in the series is a reference to what would have been the market value of all those assets for the purposes of this Act if, considering all the assets together, they had been disposed of by one disposal occurring at the time of the transaction concerned; and (b) any reference in section 19 to the appropriate portion of the aggregate market value of the assets disposed of by all the transactions in the series is a reference to that portion of the market value determined in accordance with paragraph (a) above which it is reasonable to apportion to those of the assets which were actually disposed of by the transaction concerned. (5) The reference in subsection (4)(a) above to considering all the assets together includes a reference not only to considering them as a group or holding or collection of assets retaining their separate identities but also (if it gives a higher market value) to considering them as brought together, physically or in law, so as to constitute either a single asset or a number of assets which are distinct from those which were comprised in each of the transactions concerned. (6) If any of the assets disposed of by all the transactions in a series of linked transactions were acquired after the time of the first of those transactions, then, in the application of subsections (4) and (5) above in relation to each of the transactions in the series— (a) no account shall be taken of any assets which were acquired after the time of that transaction unless they were acquired by way of an inter-group transfer; and (b) subject to subsection (7) below, the number of assets of which account is to be taken shall be limited to the maximum number which were held by the person making the disposal at any time in the period beginning immediately before the first of the transactions in the series and ending immediately before the last. (7) If, before the first of the transactions referred to in paragraph (b) of subsection (6) above, the person concerned (being a company) disposed of any assets by way of an inter-group transfer, the maximum number of assets referred to in that paragraph shall be determined as if the inter-group transfer had occurred after that first transaction. (8) In the application of subsection (6) above in a case where the assets disposed of are securities, the assets disposed of by any of the transactions in a series of linked transactions shall be identified with assets acquired on an earlier date rather than with assets acquired on a later date. (9) In subsection (8) above “securities” includes any assets which are of a nature to be dealt in without identifying the particular assets disposed of or acquired.

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21 Assets and disposals.

(1) All forms of property shall be assets for the purposes of this Act, whether situated in the United Kingdom or not, including— (a) options, debts and incorporeal property generally, and (b) currency, with the exception (subject to express provision to the contrary) of sterling, (c) any form of property created by the person disposing of it, or otherwise coming to be owned without being acquired. (2) For the purposes of this Act— (a) references to a disposal of an asset include, except where the context otherwise requires, references to a part disposal of an asset, and (b) there is a part disposal of an asset where an interest or right in or over the asset is created by the disposal, as well as where it subsists before the disposal, and generally, there is a part disposal of an asset where, on a person making a disposal, any description of property derived from the asset remains undisposed of.

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22 Disposal where capital sums derived from assets.

(1) Subject to sections 23 and 26(1), and to any other exceptions in this Act, there is for the purposes of this Act a disposal of assets by their owner where any capital sum is derived from assets notwithstanding that no asset is acquired by the person paying the capital sum, and this subsection applies in particular to— (a) capital sums received by way of compensation for any kind of damage or injury to assets or for the loss, destruction or dissipation of assets or for any depreciation or risk of depreciation of an asset, (b) capital sums received under a policy of insurance of the risk of any kind of damage or injury to, or the loss or depreciation of, assets, (c) capital sums received in return for forfeiture or surrender of rights, or for refraining from exercising rights, and (d) capital sums received as consideration for use or exploitation of assets. (2) In the case of a disposal within paragraph (a), (b), (c) or (d) of subsection (1) above, the time of the disposal shall be the time when the capital sum is received as described in that subsection. (3) In this section “capital sum” means any money or money’s worth which is not excluded from the consideration taken into account in the computation of the gain. (4) Subsection (1) does not apply where a company receives, or becomes entitled to receive— (a) a capital distribution within the meaning of section 122 (see instead subsection (1) of that section), or (b) a distribution to which the charge to corporation tax on income under Part 9A of CTA 2009 (company distributions) applies or would apply were the distribution not exempt for the purposes of that Part.

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23 Receipt of compensation and insurance money not treated as a disposal.

(1) If the recipient so claims, receipt of a capital sum within paragraph (a), (b), (c) or (d) of section 22(1) derived from an asset which is not lost or destroyed shall not be treated for the purposes of this Act as a disposal of the asset if— (a) the capital sum is wholly applied in restoring the asset, or (b) (subject to subsection (2) below), the capital sum is applied in restoring the asset except for a part of the capital sum which is not reasonably required for the purpose and which is small as compared with the whole capital sum, or (c) (subject to subsection (2) below), the amount of the capital sum is small, as compared with the value of the asset, but, if the receipt is not treated as a disposal, all sums which would, if the receipt had been so treated, have been brought into account as consideration for that disposal in the computation of the gain shall be deducted from any expenditure allowable under Chapter III of this Part as a deduction in computing a gain on the subsequent disposal of the asset. (2) If the allowable expenditure is less than the consideration for the disposal constituted by the receipt of the capital sum (or is nil)— (a) paragraphs (b) and (c) of subsection (1) above shall not apply, and (b) if the recipient so elects (and there is any allowable expenditure)— (i) the amount of the consideration for the disposal shall be reduced by the amount of the allowable expenditure, and (ii) none of that expenditure shall be allowable as a deduction in computing a gain accruing on the occasion of the disposal or any subsequent occasion. In this subsection “allowable expenditure” means expenditure which, immediately before the disposal, was attributable to the asset under paragraphs (a) and (b) of section 38(1). (3) If, in a case not falling within subsection (1)(b) above, a part of a capital sum within paragraph (a) or paragraph (b) of section 22(1) derived from an asset which is not lost or destroyed is applied in restoring the asset, then if the recipient so claims, that part of the capital sum shall not be treated as consideration for the disposal deemed to be effected on receipt of the capital sum but shall be deducted from any expenditure allowable under Chapter III of this Part as a deduction in computing a gain on the subsequent disposal of the asset. (4) If an asset is lost or destroyed and a capital sum received by way of compensation for the loss or destruction, or under a policy of insurance of the risk of the loss or destruction, is within one year of receipt, or such longer period as the inspector may allow, applied in acquiring an asset in replacement of the asset lost or destroyed the owner shall if he so claims be treated for the purposes of this Act— (a) as if the consideration for the disposal of the old asset were (if otherwise of a greater amount) of such amount as would secure that on the disposal neither a gain nor a loss accrues to him, and (b) as if the amount of the consideration for the acquisition of the new asset were reduced by the excess of the amount of the capital sum received by way of compensation or under the policy of insurance, together with any residual or scrap value, over the amount of the consideration which he is treated as receiving under paragraph (a) above. (5) A claim shall not be made under subsection (4) above if part only of the capital sum is applied in acquiring the new asset but if all of that capital sum except for a part which is less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal of the old asset is so applied, then the owner shall if he so claims be treated for the purposes of this Act— (a) as if the amount of the gain so accruing were reduced to the amount of the said part (and, if not all chargeable gain, with a proportionate reduction in the amount of the chargeable gain), and (b) as if the amount of the consideration for the acquisition of the new asset were reduced by the amount by which the gain is reduced under paragraph (a) of this subsection. (6) If a building (“the old building”) is destroyed or irreparably damaged, and all or part of a capital sum received by way of compensation for the destruction or damage, or under a policy of insurance of the risk of the destruction or damage, is applied by the recipient in constructing or otherwise acquiring a replacement building situated on other land (“the new building”), then for the purposes of subsections (4) and (5) above each of the old building and the new building shall be regarded as an asset separate from the land on which it is or was situated and the old building shall be treated as lost or destroyed. (7) For the purposes of subsection (6) above: (a) references to a building include references to any permanent or semi-permanent structure in the nature of a building; and (b) the reference to a sum applied in acquiring the new building does not include a reference to a sum applied in acquiring the land on which the new building is situated; and (c) all necessary apportionments shall be made of any expenditure, compensation or consideration, and the method of apportionment shall be such as is just and reasonable. (8) This section shall apply in relation to a wasting asset with the following modifications: (a) paragraphs (b) and (c) of subsection (1) above, and subsection (2) above, shall not apply; and (b) in subsections (1) and (3) above, the amount of the expenditure from which the deduction is to be made shall be the amount which would have been allowable under Chapter III of this Part if the asset had been disposed of immediately after the application of the capital sum.

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24 Disposals where assets lost or destroyed, or become of negligible value.

(1) Subject to the provisions of this Act and, in particular to sections 140A(1D), 140E(7) and 144, the occasion of the entire loss, destruction, dissipation or extinction of an asset shall, for the purposes of this Act, constitute a disposal of the asset whether or not any capital sum by way of compensation or otherwise is received in respect of the destruction, dissipation or extinction of the asset. (1A) A negligible value claim may be made by the owner of an asset (“P”) if condition A or B is met. (1B) Condition A is that the asset has become of negligible value while owned by P. (1C) Condition B is that— (a) the disposal by which P acquired the asset was a no gain/no loss disposal, (b) at the time of that disposal the asset was of negligible value, and (c) between the time when the asset became of negligible value and the disposal by which P acquired it, each other disposal (if any) of the asset was a no gain/no loss disposal. (2) Where a negligible value claim is made: (a) this Act shall apply as if the claimant had sold, and immediately reacquired, the asset at the time of the claim or (subject to paragraphs (b) and (c) below) at any earlier time specified in the claim, for a consideration of an amount equal to the value specified in the claim. (b) An earlier time may be specified in the claim if: (i) the claimant owned the asset at the earlier time; and (ii) the asset had become of negligible value at the earlier time; and either (iii) for capital gains tax purposes the earlier time is not more than two years before the beginning of the year of assessment in which the claim is made; or (iv) for corporation tax purposes the earlier time is on or after the first day of the earliest accounting period ending not more than two years before the time of the claim. (c) Section 93 of and Schedule 12 to the Finance Act 1994 (indexation losses and transitional relief) shall have effect in relation to an asset to which this section applies as if the sale and reacquisition occurred at the time of the claim and not at any earlier time. (3) For the purposes of this section, a building and any permanent or semi-permanent structure in the nature of a building may be regarded as an asset separate from the land on which it is situated, but where a building or structure is so regarded, the person deemed to make the disposal of the building or structure shall be treated as if he had also sold, and immediately reacquired, the site of the building or structure (including in the site any land occupied for purposes ancillary to the use of the building or structure) for a consideration equal to its market value at that time. (3A) Subsection (3C) applies, for the purposes of this section, in relation to an asset which is a leasehold interest in a building or structure by reference to which a person is entitled to an allowance under Part 2A of CAA 2001 (structures and buildings allowances). (3B) For the purposes of subsection (3A), “leasehold interest” is to be construed in accordance with section 270IH of CAA 2001. (3C) Where this subsection applies— (a) the building or structure is to be regarded, for the purposes of this section, as an asset separate from the land on which it is situated, and (b) subsection (3) does not apply. (3D) But subsection (3C) does not apply if the person deemed to make the disposal of the building or structure makes an election under this subsection. (3E) An election under subsection (3D), in respect of a deemed disposal, must be made by a notice given to an officer of Revenue and Customs— (a) in the case of an election by a person within the charge to corporation tax, within the period of two years from the end of the accounting period in which the disposal is deemed to be made; and (b) in any other case, on or before the first anniversary of the 31 January following the year of assessment in which the disposal is deemed to be made. (3F) An election under subsection (3D) is irrevocable. (4) For the purposes of subsection (1C), a no gain/no loss disposal is one which, by virtue of any of the no gain/no loss provisions, neither a gain nor a loss accrues to the person making the disposal.

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24A Structures and buildings contributions allowances: destruction of asset

(1) This section applies if— (a) there is a deemed disposal of an asset by a person (“P”) under section 24(1), (b) the asset is an interest in a building or structure which is “an interest in UK land” (as defined in section 1C) or an equivalent interest in land outside the United Kingdom, (c) a contribution allowance under Part 2A of CAA 2001 (see section 538A of that Act) has been made to another person (“C”) by reference to C’s contribution to expenditure in relation to the building or structure, and (d) C does not have an interest in the building or structure which is “an interest in UK land” for the purposes of section 1C. (2) C may make a claim for this Act to have effect as if an allowable loss equal to the unclaimed allowance amount had accrued to C on the deemed disposal of the asset by P. (3) For the purposes of this section, the “unclaimed allowance amount” in relation to a contribution allowance under Part 2A of CAA 2001, is the amount of the difference between— (a) the qualifying contribution amount, and (b) the amount of the contribution allowance to which an entitlement arose (or would have arisen if the conditions in section 270AA(2) of that Act had been met at all times since an entitlement to the contribution allowance first arose) before the deemed disposal under section 24(1). (4) For the purposes of subsection (3), the “qualifying contribution amount” is the amount of C’s contribution to expenditure in respect of which the contribution allowance is available (see sections 270AA and 538A of that Act), if and to the extent that the expenditure is not allowable under section 38 as a deduction in computing the gain accruing to P on the deemed disposal. (5) A claim under this section must— (a) include information identifying the building or structure by reference to which the contribution allowance was made, and (b) specify the unclaimed allowance amount.

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25 Non-residents: deemed disposals.

(1) Where an asset ceases by virtue of becoming situated outside the United Kingdom to be a chargeable asset in relation to a person, he shall be deemed for all purposes of this Act— (a) to have disposed of the asset immediately before the time when it became situated outside the United Kingdom, and (b) immediately to have reacquired it, at its market value at that time. (2) Subsection (1) above does not apply— (a) where the asset becomes situated outside the United Kingdom contemporaneously with the person there mentioned ceasing to carry on a trade in the United Kingdom through a branch or agency, or (b) where the asset is an exploration or exploitation asset. (3) Where an asset ceases to be a chargeable asset in relation to a person by virtue of his ceasing to carry on a trade in the United Kingdom through a branch or agency, he shall be deemed for all purposes of this Act— (a) to have disposed of the asset immediately before the time when he ceased to carry on the trade in the United Kingdom through a branch or agency, and (b) immediately to have reacquired it, at its market value at that time. (3A) Subsection (3) above shall not apply if— (a) the person ceasing to carry on the trade is a company, and (b) on ceasing to carry on the trade the asset is disposed of in circumstances in which section 139 or 171 applies. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) Subsection (3) above does not apply to an asset which is a chargeable asset in relation to the person there mentioned at any time after he ceases to carry on the trade in the United Kingdom through a branch or agency and before the end of the chargeable period in which he does so. (6) In this section— “exploration or exploitation asset” means an asset used in connection with exploration or exploitation activities carried on in the United Kingdom or a designated area, and “designated area” and “exploration or exploitation activities” have the same meanings as in section 276. (7) For the purposes of this section an asset is at any time a chargeable asset in relation to a person if, were it to be disposed of at that time, any chargeable gains accruing to him on the disposal would be chargeable to capital gains tax under section 1A(3)(a) or to corporation tax under section 2B(3). (8) This section shall apply as if references to a trade included references to a profession or vocation.

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25ZA Postponing gain or loss under section 25(3): interests in UK land

(1) This section applies if an interest in UK land is deemed to have been disposed of under section 25(3) by a person at any time. (2) The gain or loss that, but for this subsection, would have accrued to the person at that time is not to accrue at that time. (3) But, on a subsequent disposal by the person of the whole or part of the interest in UK land, the whole or a corresponding part of the gain or loss is treated as accruing on the subsequent disposal. (4) This gain or loss is in addition to any gain or loss that actually accrues on the subsequent disposal. (5) A disposal to which section 171 (transfers within a group) applies does not count as a subsequent disposal for the purposes of this section. (6) A person may elect for a disposal deemed to have been made under section 25(3) to be excluded from the operation of this section. (7) An election made by a company must be made within 2 years after the day on which the deemed disposal occurs. (8) In this section “interest in UK land” has the meaning given by section 1C.

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25A Long funding leases of plant or machinery: deemed disposals

(1) This section applies where plant or machinery is used for the purpose of leasing under a long funding lease. (2) The lessor shall be deemed for all purposes of this Act— (a) to have disposed of the plant or machinery at the commencement of the term of the lease at the relevant disposal value, and (b) to have immediately reacquired it at the same value. (3) The lessor shall also be deemed for all purposes of this Act— (a) to have disposed of the plant or machinery on the termination of the lease for a consideration equal to the termination amount, and (b) to have immediately reacquired it for the same consideration. (4) “Relevant disposal value” means— (a) in relation to a long funding finance lease, the disposal value described in item 5A of the table in section 61(2) of the Capital Allowances Act (disposal values), and (b) in relation to a long funding operating lease, the disposal value described in item 5B of that table. (5) For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)— “commencement”, in relation to the term of a lease, “lessor”, “long funding lease”, “long funding finance lease”, “long funding operating lease”, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “the term”, in relation to a lease, “termination”, “termination amount”.

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26 Mortgages and charges not to be treated as disposals.

(1) The conveyance or transfer by way of security of an asset or of an interest or right in or over it, or transfer of a subsisting interest or right by way of security in or over an asset (including a retransfer on redemption of the security), shall not be treated for the purposes of this Act as involving any acquisition or disposal of the asset. (2) Where a person entitled to an asset by way of security or to the benefit of a charge or incumbrance on an asset deals with the asset for the purpose of enforcing or giving effect to the security, charge or incumbrance, his dealings with it shall be treated for the purposes of this Act as if they were done through him as nominee by the person entitled to it subject to the security, charge or incumbrance; and this subsection shall apply to the dealings of any person appointed to enforce or give effect to the security, charge or incumbrance as receiver and manager or judicial factor as it applies to the dealings of the person entitled as aforesaid. (3) An asset shall be treated as having been acquired free of any interest or right by way of security subsisting at the time of any acquisition of it, and as being disposed of free of any such interest or right subsisting at the time of the disposal; and where an asset is acquired subject to any such interest or right the full amount of the liability thereby assumed by the person acquiring the asset shall form part of the consideration for the acquisition and disposal in addition to any other consideration.

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