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HMRC internal manual

Capital Gains Manual

Introduction and computation: occasions of charge: assets lost/destroyed/negligible value: date of deemed disposal/reacquisition

TCGA92/S24(2)(a) - Date of deemed disposal/reacquisition

The decision in Williams v Bullivant (56TC159) established the general rule that the date of the deemed disposal and reacquisition is the date of the claim.  Any resulting loss thus arises at the date of the claim.  The date of the claim is the date on which the claim is received by HMRC.

Where the asset has become of negligible value, the claimant may generally claim that the asset is deemed to have been disposed of and reacquired at the time of the claim or at an earlier time.  An earlier time may be specified for the claim if

  • the claimant owned the asset at the earlier time; and
  • the asset had become of negligible value at the earlier time; and either
  • for a person other than a company, the earlier time is not more than two years before the beginning of the year of assessment in which the claim is made, or
  • in the case of a company, the earlier time is on or after the first day of the earliest accounting period ending not more than two years before the time of the claim.

However, an earlier time may not be specified if TCGA92/SCH7AC/PARA33 (exemptions for disposals by companies with substantial shareholdings) applies, see CG53210.

TCGA92/S24(2)(c) - Indexation allowance

Section 24(2)(c) applies the indexation allowance rules (see CG17700+) by reference to the time of the claim, not the time of the deemed disposal.

NOTE. If a claimant is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008.  Indexation allowance is still available to companies and other concerns within the charge to Corporation Tax (see CG17200c onwards).