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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Insurance agent: `Book' held 31/3/82: no rebasing election

If there is no election under TCGA92/S35 (5) in force, it will be necessary to compare the gain or loss computed by reference to the valuation at 31 March 1982 with the gain or loss computed by reference to original cost. And indexation allowance should automatically be computed by reference to whichever of cost or 1982 valuation is most favourable to the taxpayer.

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+.

If the computation shows a gain by reference to the valuation at 31 March 1982, the kink test cannot have the effect of increasing the gain. But you may need to apply the kink test to restrict a loss. You may accept any reasonable method of applying the kink test if a loss restriction is shown in the computation. Alternatively, you can ask Capital Gains Technical Group for advice.