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HMRC internal manual

Capital Gains Manual

Capital Gains Manual: Introduction and computation: occassions of charge: Part-disposals: no gain/no loss disposals

TCGA92/S42 (5)

TCGA92/S42 (5) makes it clear that the provisions for the apportionment of cost on a part-disposal are to be operated before the various provisions which secure that, in certain circumstances, neither a gain nor a loss is deemed to have arisen on a disposal. Those provisions include:

  • TCGA92/S58 (1) (husband and wife or civil partners), see CG22200+
  • TCGA92/S171 (1) (transfers within group of companies), see CG45300+
  • TCGA92/S152 (replacement of business assets), see CG60250+.


X and Y are a husband and wife, or civil partners of each other, or members of a group of companies. X has an asset which cost £40,000 and transfers part of the asset to Y, the market value of that part at the time of transfer being £30,000. The remainder of the asset has a market value of £20,000.

The part-disposal rules are applied on the basis that the part of the asset transferred to Y was disposed of at market value. The part of the cost apportioned to the disposal is

£40,000 x        £30,000           = £24,000

               £30,000 + £20,000

For the purposes of any later disposal by X the adjusted cost of the remainder of the asset is

£40,000 - £24,000 = £16,000.

Y has an acquisition cost of £24,000 in respect of the part of the asset transferred to him, see CG12737.