Capital Gains Tax Act 1979 (repealed 6.3.1992)

Part I U.K. Valuation

Preliminary U.K.

1 This Part of this Schedule has effect in cases where the market value of an asset or any part of it at a time before the commencement of this Act is material to the computation of a gain under this Act, and in those cases—

(a) section 150 of this Act (which is the same as paragraph 2 below with the amendments in paragraph 4) shall not apply,

(b) section 152 of this Act shall only apply to the extent specified in paragraphs 5 to 8 below,

(but sections 151 and 153 of this Act shall apply in those cases as in later cases).

Original rules U.K.

2 (1) “Market value” in relation to any assets means the price which those assets might reasonably be expected to fetch on a sale in the open market.

(2) In estimating the market value of any assets no reduction shall be made in the estimate on account of the estimate being made on the assumption that the whole of the assets is to be placed on the market at one and the same time:

Provided that where capital gains tax is chargeable, or an allowable loss accrues, in consequence of a death before 31st March 1971 and the market value of any property on the date of death taken into account for the purposes of that tax or loss has been depreciated by reason of the death the estimate of the market value shall take that depreciation into account.

(3) The market value of shares or securities quoted on the London Stock Exchange shall, except where in consequence of special circumstances prices so quoted are by themselves not a proper measure of market value, be as follows—

(a) the lower of the two prices shown in the quotations for the shares or securities in the Stock Exchange Official Daily List on the relevant date plus one-quarter of the difference between those two figures, or

(b) halfway between the highest and lowest prices at which bargains, other than bargains done at special prices, were recorded in the shares or securities for the relevant date,

choosing the amount under paragraph (a) if less than that under paragraph (b), or if no such bargains were recorded for the relevant date, and choosing the amount under paragraph (b) if less than that under paragraph (a):

Provided that—

(i)

this sub-paragraph shall not apply to shares or securities for which some other stock exchange in the United Kingdom affords a more active market, and

(ii)

if the London Stock Exchange is closed on the relevant date the market value shall be ascertained by reference to the latest previous date or earliest subsequent date on which it is open, whichever affords the lower market value.

(4) “Market value” in relation to any rights of unit holders in any unit trust scheme the buying and selling prices of which are published regularly by the managers of the scheme shall mean an amount equal to the buying price (that is the lower price) so published on the relevant date, or if none were published on that date, on the latest date before.

(5) In relation to an asset of a kind the sale of which is subject to restrictions imposed under the M1 Exchange Control Act 1947 such that part of what is paid by the purchaser is not retainable by the seller the market value, as arrived at under sub-paragraph (1), (3) or (4) above, shall be subject to such adjustment as is appropriate having regard to the difference between the amount payable by a purchaser and the amount receivable by a seller.

(6) This paragraph has effect subject to the following provisions of this Part of this Schedule.

Marginal Citations

M1 1947 c. 14.

Value of quoted securities on 6th April 1965 U.K.

3 (1) For the purpose of ascertaining the market value of any shares or securities in accordance with paragraph 1(2) of Schedule 5 to this Act, paragraph 2 above shall have effect subject to the provisions of this paragraph.

(2) Sub-paragraph (3)(a) of that paragraph shall have effect as if for the words, “one-quarter” there were substituted the words “ one-half ”, and as between the amount under paragraph (a) and the amount under paragraph (b) of that sub-paragraph the higher, and not the lower, amount shall be chosen.

(3) Sub-paragraph (4) of that paragraph shall have effect as if for the reference to an amount equal to the buying price there were substituted a reference to an amount halfway between the buying and selling prices.

(4) Where the market value of any shares or securities not within the said sub-paragraph (3) falls to be ascertained by reference to a pair of prices quoted on a stock exchange, an adjustment shall be made so as to increase the market value by an amount corresponding to that by which any market value is increased under sub-paragraph (2) above.

References to Stock Exchange on or after 25th March 1973 U.K.

4 Except in relation to anything done before 25th March 1973, paragraph 2(3) above shall have effect subject to the following amendments—

(a) for the words “quoted on the London Stock Exchange” there shall be substituted the words “ listed in The Stock Exchange Daily Official List ” and for the words “so quoted” the words “ quoted in that List ”;

(b) for the words “the Stock Exchange Official Daily List” there shall be substituted the words “ The Stock Exchange Daily Official List ”;

(c) for the words “some other stock exchange in the United Kingdom affords a more active market” there shall be substituted the words “ The Stock Exchange provides a more active market elsewhere than on the London trading floor ”; and

(d) for the words “if the London Stock Exchange is closed” there shall be substituted the words “ if the London trading floor is closed ”.

Unquoted shares and securities: application of section 152 to acquisitions before commencement of this Act U.K.

5 Paragraphs 6 to 8 below shall have effect with respect to the application of section 152 of this Act, and in those paragraphs “asset” means an asset to which that section applies.

6 Subject to paragraphs 7 and 8 below, if the market value of an asset or any part of it at the time of its acquisition is material to the computation of any chargeable gain under this Act then, notwithstanding that the acquisition may have occurred before 6th July 1973 (the date on which the provision re-enacted in section 152 of this Act first came into operation as respects disposals) or that the market value of the asset at the time of its acquisition may have been fixed for the purposes of a contemporaneous disposal, section 152 of this Act shall apply for the purposes of the determination of the market value of the asset or, as the case may be, that part of it at the time of its acquisition.

Unquoted shares or securities: acquisition on death U.K.

7 (1) This paragraph applies if, in a case where the market value of an asset at the time of its acquisition is material as mentioned in paragraph 6 above,—

(a) the acquisition took place on the occasion of a death occurring after 30th March 1971 and before 6th July 1973, and

(b) by virtue of paragraph 9 below, the principal value of the asset for the purposes of estate duty on that death would, apart from this paragraph, be taken to be the market value of the asset at the date of the death for the purposes of this Act.

(2) If the principal value referred to in sub-paragraph (1)(b) above falls to be determined as mentioned in section 55 of the M2 Finance Act 1940 or section 15 of the M3 Finance (No. 2) Act (Northern Ireland) 1946 (certain controlling shareholdings to be valued on an assets basis), nothing in section 152 of this Act shall affect the operation of paragraph 9 below for the purpose of determining the market value of the asset at the date of the death.

(3) If sub-paragraph (2) above does not apply, paragraph 9 below shall not apply as mentioned in sub-paragraph (1)(b) above and the market value of the asset on its acquisition at the date of the death shall be determined in accordance with paragraphs 2 and 6 above.

Marginal Citations

M2 1940 c. 29.

M3 1946 c. 17 (N.I.)

Unquoted shares or securities: prior part disposal U.K.

8 (1) In any case where—

(a) before 6th July 1973 there has been a part disposal of an asset to which section 152 of this Act applies (in this paragraph referred to as “the earlier disposal”), and

(b) by virtue of any enactment, the acquisition of the asset or any part of it was deemed to be for a consideration equal to its market value, and

(c) on or after 6th July 1973 there is a disposal (including a part disposal) of the property which remained undisposed of immediately before that date (in this paragraph referred to as “the later disposal”),

sub-paragraph (2) below shall apply in computing any chargeable gain accruing on the later disposal.

(2) Where this sub-paragraph applies, the apportionment made by virtue of paragraph 7 of Schedule 6 to the M4 Finance Act 1965 (corresponding to section 35 of this Act) on the occasion of the earlier disposal shall be recalculated on the basis that section 152(3) of this Act was in force at the time, and applied for the purposes, of the determination of—

(a) the market value referred to in sub-paragraph (1)(b) above, and

(b) the market value of the property which remained undisposed of after the earlier disposal, and

(c) if the consideration for the earlier disposal was, by virtue of any enactment, deemed to be equal to the market value of the property disposed of, that market value.

Marginal Citations

M4 1965 c. 25.

Value determined for estate duty U.K.

9 (1) Where estate duty (including estate duty leviable under the law of Northern Ireland) is chargeable in respect of any property passing on a death after 30th March 1971 and the principal value of an asset forming part of that property has been ascertained (whether in any proceedings or otherwise) for the purposes of that duty, the principal value so ascertained shall, subject to paragraph 7(3) above, be taken for the purposes of this Act to be the market value of that asset at the date of the death.

(2) Where the principal value has been reduced under section 35 of the M5 Finance Act 1968 or section 1 of the M6 Finance Act (Northern Ireland) 1968 (tapering relief for gifts inter vivos etc.), the reference in sub-paragraph (1) above to the principal value as ascertained for the purposes of estate duty is a reference to that value as so ascertained before the reduction.

Marginal Citations

M5 1968 c. 44.

M6 1968 c. 17 (N.I.)