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HMRC internal manual

Capital Gains Manual

Rebasing for companies: halving relief for deferred gains pre-31/3/82: introduction


There are a number of provisions, apart from the no gain/no loss provisions, under which tax on capital gains on a disposal can be deferred until some later time. The most common ones are the hold-over relief provisions for gifts and roll-over relief for the replacement of business assets. Where, under one of these provisions, there has been a deferral after 31 March 1982 and before 6 April 1988, the benefit of capital gains rebasing to 1982 will not be available. This is because the event triggering the charge on the deferred gains is not the disposal on or after 6 April 1988 of an asset which the person held on 31 March 1982. In some cases, it will be the disposal of an asset which the person acquired later; in others, the charge does not arise on a disposal at all but on some other event (for example, the person becoming non-resident or a company leaving a group).

To give the precise equivalent of rebasing to 1982, it would have been necessary to establish how far the deferred gains were attributed to increases in value up to 31 March 1982. This was impracticable. Nevertheless Parliament decided that some relief should be available. This became known as “halving relief”.

CGT Simplification, including a single rate of CGT applies for disposals on or after 6 April 2008. As part of CGT Simplification, this relief for deferred gains is now only applicable to companies. This guidance was revised in 2014 and now focuses on companies but would also be relevant for capital gains tax disposals before 6 April 2008.

TCGA92/SCH4 provides a measure of relief in cases where it can be established that part or all of the deferred gain results directly or indirectly from a disposal of an asset acquired before 31 March 1982. The provisions are examined in detail in CG16983+.