CG46300 - Groups: rebasing
Rebasing applies to disposals on or after 6 April 1988 of assets held on 31 March 1982. The general rule is that the gain or loss is computed by reference to 31 March 1982 market value. This is subject to a `kink test' which compares the rebased gain or loss with the result by reference to historic cost. If each method produces a gain, the smaller gain is the chargeable gain. Similarly with losses. But taxpayers can elect out of the kink test, in which case they compute the gains and losses on the disposal of their assets solely by reference to 31 March 1982 market value.
The general structure of the rebasing legislation does not distinguish between companies and other taxpayers. But a number of the rebasing rules refer to other statutory provisions which apply only to companies or groups of companies. The following instructions summarise the rebasing provisions which particularly affect companies and groups. The instructions at CG46360 give detailed guidance on group elections out of the kink test. General instructions on rebasing are at CG16700C.