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HMRC internal manual

Capital Gains Manual

Assets held on 6/4/65: part-disposals after 5/4/65

TCGA92/SCH2/PARA16 (8)Where there was a part-disposal on or after 6 April 1965 the computation of the charge on the part then disposed of requires

  • the ascertainment of the market value of the part not disposed of, and
  • the apportionment of the allowable expenditure on the asset appropriate to the part not disposed of (the residue of the expenditure after the computation of the gain accruing on the part-disposal).These amounts are used in the computation of the gain on the disposal of the part of the asset retained. This proceeds on the following basis

  • First the entire gain over the whole period of ownership is computed.
  • Next the gain for the period from the original acquisition of the asset to the date of the part-disposal is computed and apportioned to ascertain the gain which accrued after 6 April 1965.
  • To this gain is added the balance of the gain from the date of the part-disposal to the date of the later disposal. This is obtained by deducting the gain accruing up to the time of the part- disposal from the entire gain over the whole period of ownership.The gain is after taking any indexation allowance into account. For examples see CG15601 and CG15602.

NOTE. If a taxpayer 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. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207+ and for taper relief see CG17895+.