Taxation of Chargeable Gains Act 1992

[F1 6 (1) This paragraph applies if— U.K.

(a) an election is made by P under paragraph 5 in respect of the chargeable interest which (or a part of which) is the subject of the relevant high value disposal, or

(b) the chargeable interest (or part) disposed of by the relevant high value disposal was not held by P throughout the period beginning with 5 April 2013 and ending with the disposal.

(2) The ATED-related gain or loss accruing on the relevant high value disposal is computed as follows.

• Step 1 Determine the amount of the gain or loss which would accrue to P, ignoring section 2B and this Schedule (but not the remainder of this Step). For this purpose, the amount of the gain or loss is to be computed (whether or not that would otherwise be the case) as if P were within the charge to capital gains tax (but not within the charge to corporation tax on chargeable gains).

• Step 2 An amount equal to the relevant fraction of that gain or loss is the ATED-related gain or loss accruing on the relevant high value disposal.

(3) The gain or loss accruing on the relevant high value disposal which is not ATED-related is to be computed as follows.

• Step 1 In a case where there is a gain under Step 1 of sub-paragraph (2)—

  (a)

  determine the amount of the gain remaining after the deduction of the ATED-related gain, and

  (b)

  adjust the remaining gain by reducing it by an amount equal to the notional indexation allowance.

  That adjusted gain is the gain accruing on the relevant high value disposal which is not ATED-related.

• Step 2 In a case where there is a loss under Step 1 of sub-paragraph (2), determine the amount of the loss remaining after deduction of the ATED-related loss. That remaining loss is the loss accruing on the relevant high value disposal which is not ATED-related.

(4) “Notional indexation allowance” means the relevant fraction of the indexation allowance which would be made under Chapter 4 of Part 2 in determining the gain under Step 1 in sub-paragraph (2) were that gain being computed for corporation tax purposes.

(5) Subject to sub-paragraph (6), “the relevant fraction”—

(a) in sub-paragraph (2) has the same meaning as in paragraph 3(4), and

(b) in sub-paragraph (4) has the same meaning as in paragraph 4(6).

(6) For the purpose of determining the relevant fraction under sub-paragraph (5), paragraph 3(5) has effect as if the relevant ownership period began on the day on which P acquired the interest or, if later, 31 March 1982.]

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