CG14295 - Introduction and computation: computation: date of disposal: notification, assessment and claim time limits for disposals under contract

Throughout this manual, all legislative references are to Taxation of Chargeable Gains Act 1992 (TCGA 1992) unless otherwise stated.

As discussed on earlier pages in this section, for many capital gains purposes, where disposal and acquisition take place under contract, section 28 fixes the time of disposal.

The actual disposal of an asset will sometimes happen in a tax year different to the date of disposal fixed by section 28. In April 2023 new rules were introduced to amend the time limits for assessments and for notifying allowable losses. These rules apply in cases where the time between the date of disposal as fixed by section 28 and the actual disposal is over a certain limit, see section 28A.

Disposals on or after 6 April 2023

Section 28A will apply:

  • for individuals, where an asset is disposed of under a contract entered into on or after 6 April 2023, and the actual disposal, or deemed disposal is more than 6 months after the end of the tax year in which the disposal is treated as taking place
  • for companies, where an asset is disposed of under a contract entered into on or after 1 April 2023, and the actual disposal, or deemed disposal is more than 12 months after the end of the accounting period in which the disposal is treated as taking place

In cases where section 28A applies, the usual notification deadline and assessment and claim time limits (see disposals before 6 April 2023 below) are amended. They operate by reference to the tax year or accounting period when the contract is completed instead of by reference to the tax year or accounting period in which the contract for the disposal was made.

Example – notification, assessment and claim time limits for disposals on or after 6 April 2023

On 12 May 2023, X entered into an unconditional contract to sell a painting. X disposed of the painting on 31 December 2024.

Because that disposal took place under contract, section 28 applies. So although the actual disposal took place on 31 December 2024, section 28 provides that any chargeable gain is treated as arising on 12 May 2023 (the date the contract was made). As the disposal took place more than 6 months after the end of the tax year 2023 to 2024, section 28A applies. This means that the usual notification deadline and assessment and claim time limits operate by reference to the tax year 2024 to 2025. 

Disposals before 6 April 2023

For disposals under contract before 6 April 2023 (1 April 2023 for companies), the usual notification deadline and assessment and claim time limits apply: