HMRC internal manual

Capital Gains Manual

CG28100 - Rebasing of interests in partnership assets held at 31 March 1982

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

Guidance on the rebasing rules that apply to disposals of assets or interests in assets held on 31 March 1982 is at CG16700+.

FA2008/Sch2 introduced new rules for the calculation of gains or losses on disposals on or after 6 April 2008 of assets or interests in assets held on 31 March 1982.  The changes apply to non-corporate partners, see CG27100, whose capital gains are chargeable to Capital Gains Tax.

The pre-FA 2008 rebasing rules continue to apply to corporate partners, see CG27100, whose capital gains are chargeable to Corporation Tax.

 
 
 

FA 2008 rules: non-corporate partners – disposals on or after 6 April 2008

For disposals on or after 6 April 2008 of assets or interests in assets held on 31 March 1982 gains or losses are computed as if the assets disposed of had been acquired at their market value on 31 March 1982.  In effect allowable expenditure is “rebased” to 31 March 1982.

TCGA92/S35A applies where a person (“P”) disposes of an asset on or after 6 April 2008 and:

  • ”P” acquired the asset after 31 March 1982 and before 6 April 2008 under a statutory no gain/no loss provision, and
  • any previous disposal and acquisition of the asset after 31 March 1982 was one to which a statutory no gain/no loss provision applied, and
  • rebasing under TCGA92/S35(2) did not apply to the relevant disposal, that is, the disposal of the asset to P.

Where these conditions are satisfied TCGA92/S35A (2) provides that the allowable expenditure taken into account in computing a gain or loss when P disposes of the asset on or after 6 April 2008 includes the value of the asset at 31 March 1982 and the indexation allowance due for the period from 31 March 1982 to the month in which P acquired the asset or, if earlier, to April 1998. 

Examples of how these rules apply in relation to disposals of interests in partnership assets are given at CG28160.

The rules for disposals before 6 April 2008 are explained below.

Pre-FA 2008 rules – corporate partners within the charge to CT on chargeable gains

The rebasing provisions in TCGA92/S35 and TCGA92/Sch3 apply to disposals on or after 6 April 1988 of assets or interests in assets held on 31 March 1982.

They provide that assets held at 31 March 1982 are treated as if they had been acquired at their market value on that date so that gains or losses relating to changes in value before that date are not taken into account for CG purposes. 

CG28140 explains HMRC’s practice where a transfer between partners of an interest in an asset that was held by a partnership on 31 March 1982 results in neither a gain nor a loss.

Examples of how these rules apply in relation to disposals of interests in partnership assets are at CG28160.