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HMRC internal manual

Capital Gains Manual

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Rebasing to 31/3/82: rebasing elections: other points

Excluded assets

TCGA92/SCH3/PARA7

Certain assets are excluded from this election:-

  • plant and machinery in respect of which capital allowances have or could have been given to the person making the disposal
  • assets used in connection with a trade of working mineral deposits in respect of which capital allowances have or could have been given to the person making the disposal
  • oil licences
  • shares which, on 31 March 1982, were unquoted and derived the greater part of their value directly or indirectly from oil exploration or exploitation assets situated in the UK or on the continental shelf (for disposals on or after 22 January 1990).

Interests in such assets are also excluded from the election.

When considering whether capital allowances have or could have been given to the person making the disposal it is necessary to look back through specified no gain/no loss disposals. These are listed in CG16880.

Time limit for election

TCGA92/S35 (6)

An election under TCGA92/S35 (5) must be made by notice in writing to an officer of the Board. When rebasing was introduced in 1988 an opportunity was given for anyone to make an election if they wanted to before 6 April 1990. If no election had been made by then elections could still be made

  • by companies: within two years of the end of the accounting period in which the first relevant disposal is made; therefore it is still theoretically possible for a company to make an election
  • by others: within the period ending with the first anniversary of the 31 January next following the year of assessment in which the first relevant disposal is made (for years before Self Assessment, see CG10301, within two years of the end of that year of assessment), but the question of whether an election has been made is irrelevant for disposals on or after 6 April 2008, or
  • in all cases: at such later time as the Board may allow.

Special rules are needed for elections within groups of companies and there are anti avoidance provisions where assets have been transferred between group companies before a disposal, see CG16850.

An election is irrevocable. There is no form designated for the purpose. If an election is made it should be retained in the permanent notes sub-file.

First relevant disposal

The first relevant disposal is

  • the first disposal on or after 6 April 1988 of

    • an asset held at 31 March 1982, or
    • an asset treated by TCGA92/SCH3/PARA1 as having been held at 31 March 1982, see CG16880.

In practice it is the first disposal to which the 1982 rebasing rules apply so that it is highly unlikely that any new election would now be made by a company.

Strictly the disposal of any asset is capable of being a first relevant disposal whether or not there are any capital gains implications. The Board issued Statement of Practice SP4/92 detailing specific circumstances in which it will exercise the discretion it has to extend the time allowed for a rebasing election. The effect of SP4/92 is that certain disposals can be disregarded in deciding what counts as a first relevant disposal for the purposes of starting the time limit for making an election, see CG16780.

SP4/92 replaced SP2/89 which was issued on 1 March 1989. SP4/92 does not reflect any change of practice but provided further clarification of the operation of the time limit for rebasing elections.

Late elections

If a rebasing election is made late (and the circumstances are not covered by SP4/92, see CG16804) follow the guidance on late claims and elections at CG13810. Note, however, that the extended time limits for some claims and elections allowed by TMA70/S43A that are referred to at CG13751 do NOT apply to rebasing elections.

Groups of companies

TCGA92/SCH3/PARA8, TCGA92/SCH3/PARA9

Special rules are provided in TCGA92/SCH3/PARA8, TCGA92/SCH3/PARA9 for elections by groups of companies. See CG46360+.