Taxation of Chargeable Gains Act 1992

[F1 4 (1) The gain or loss accruing on the relevant high value disposal which is not ATED-related is computed as follows. U.K.

• Step 1 Determine the amount of the notional [F3 pre-commencement] gain or loss.

• Step 2 In a case where there is a notional [F4 post-commencement] gain—

  (a)

  determine the amount of that gain remaining after the deduction of the ATED-related gain determined under paragraph 3, and

  (b)

  adjust that remaining gain by reducing it by the notional indexation allowance.

• Step 3 In a case where there is a notional [F4 post-commencement] loss, determine the amount of that loss remaining after deduction of the ATED-related loss determined under paragraph 3.

• Step 4 Add—

  (a)

  the amount of any gain or loss determined under Step 1, and

  (b)

  the amount of any adjusted gain determined under Step 2 or (as the case may be) any loss determined under Step 3,

  (treating any amount which is a loss as a negative amount).

If the result is a positive amount, that amount is the gain on the relevant high value disposal which is not ATED-related.

If the result is a negative amount, that amount (expressed as a positive number) is the loss on the relevant high value disposal which is not ATED-related.

(2) “The notional [F5 pre-commencement] gain or loss” means the gain or loss which would have accrued on [F6 5 April in the relevant year] had the interest been disposed of for a consideration equal to its market value on that date.

(3) For the purposes of sub-paragraph (2), the amount of the gain or loss accruing to P is to be computed (whether or not that would otherwise be the case) as if P were within the charge to corporation tax on chargeable gains (but not within the charge to capital gains tax).

(4) Paragraph 3(2) and (3) (meaning of “notional [F7 post-commencement] gain or loss”) also applies for the purposes of this paragraph.

(5) “Notional indexation allowance” means the relevant fraction of an amount equal to the difference between—

(a) the indexation allowance which (in the absence of section 2B and this Schedule) would be made under Chapter 4 of Part 2 in determining the gain accruing on the relevant high value disposal were that gain being computed for corporation tax purposes, and

(b) the indexation allowance which is made under Chapter 4 of Part 2 in determining the notional [F8 pre-commencement] gain.

(6) “The relevant fraction” is—

where “CD” and “TD” have the same meaning as in paragraph 3(4).]

Textual Amendments

F1 Sch. 4ZZA inserted (with effect in accordance with Sch. 25 para. 20 of the amending Act) by Finance Act 2013 (c. 29), Sch. 25 para. 16

F3 Word in Sch. 4ZZA para. 4(1) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 8 para. 10(2)(a)

F4 Word in Sch. 4ZZA para. 4(1) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 8 para. 10(2)(b)

F5 Word in Sch. 4ZZA para. 4(2) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 8 para. 10(3)(a)

F6 Words in Sch. 4ZZA para. 4(2) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 8 para. 10(3)(b)

F7 Word in Sch. 4ZZA para. 4(4) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 8 para. 10(4)

F8 Word in Sch. 4ZZA para. 4(5) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 8 para. 10(5)