Taxation of Chargeable Gains Act 1992

[F1 PART 3 U.K. Direct disposals of Pre-April 2015 assets fully chargeable before 6 April 2019

Textual Amendments

F1 Sch. 4AA inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 17

Introduction U.K.

6 (1) This Part of this Schedule applies to any direct disposal of UK land if— U.K.

(a) the person held the interest in UK land being disposed of throughout the period beginning with 6 April 2015 and ending with the disposal, and

(b) the disposal was fully residential before 6 April 2019.

(2) For this purpose a direct disposal of UK land made by a person is “fully residential before 6 April 2019” if in the period—

(a) beginning with 6 April 2015, and

(b) ending with 5 April 2019,

every day on which the land to which the disposal relates consisted of a dwelling.

(3) If the disposal is of an interest in land subsisting under a contract for the acquisition of land that, at any time in that period, did not consist of a building to be constructed or adapted for use as a dwelling, the disposal is taken to be not fully residential before 6 April 2019.

(4) This Part of this Schedule does not apply to a direct disposal of UK land made by a person who was not chargeable before 6 April 2019, as determined for the purposes of paragraph 2.

Re-basing to 5 April 2015 U.K.

7 (1) In calculating the gain or loss accruing on the disposal it is be assumed that the asset was on 5 April 2015 sold by the person, and immediately reacquired by the person, at its market value on that date. U.K.

(2) This paragraph has effect subject to any election made by the person under either—

(a) paragraph 8 (retrospective basis of calculation), or

(b) paragraph 9 (straight-line time apportionment),

(and an election may be made under only one of those paragraphs).

Election for retrospective basis of calculation U.K.

8 U.K. The person may make an election under this paragraph for the assumption that the asset is sold and reacquired as mentioned in paragraph 7 not to apply.

Election for straight-line time apportionment U.K.

9 (1) The person may make an election under this paragraph— U.K.

(a) for the assumption that the asset is sold and reacquired as mentioned in paragraph 7 not to apply, and

(b) for the gain or loss accruing on the disposal to be apportioned so that only the post-5 April 2015 proportion of it is treated as accruing on the disposal.

(2) The “post-5 April 2015 proportion” is the proportion that the days in the post-5 April 2015 period bear to the days in the ownership period.

(3) For this purpose—

• “the post-5 April 2015 period” means the day beginning with 6 April 2015 and ending with the day on which the disposal is made, and

• “the ownership period” means the period beginning with the day on which the person acquired the interest disposed of or, if later, 31 March 1982 and ending with the day on which the disposal is made.

Calculation of residential property gain if election made under paragraph 8 or 9 U.K.

10 (1) This paragraph applies if— U.K.

(a) a person makes an election under paragraph 8 in respect of a disposal on which a gain accrues, and

(b) it is necessary to determine, in accordance with Schedule 1B, how much of the gain is a residential property gain.

(2) Paragraph 2 of Schedule 1B has effect as if—

(a) sub-paragraphs (5) and (6) of that paragraph were omitted, and

(b) in that paragraph, “the applicable period” had the definition given by the next sub-paragraph.

(3) “The applicable period” means the period—

(a) beginning with the day on which the person acquired the interest in land being disposed of or, if later, 31 March 1982, and

(b) ending with the day before the day on which the disposal is made.

11 (1) This paragraph applies if— U.K.

(a) a person makes an election under paragraph 9 in respect of a disposal on which a gain accrues, and

(b) it is necessary to determine, in accordance with Schedule 1B, how much of the gain is a residential property gain.

(2) Paragraph 2 of Schedule 1B has effect as if—

(a) sub-paragraphs (5) and (6) of that paragraph were omitted, and

(b) in that paragraph, “the applicable period” had the definition given by the next sub-paragraph.

(3) “The applicable period” means the period—

(a) beginning with 6 April 2015, and

(b) ending with the day before the day on which the disposal is made.]