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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Land: development value: restriction of gain or loss

TCGA92/SCH2/PARA9 (4)The rule in CG72602 is modified in the following circumstances.

  • If the gain calculated using the 6 April 1965 value is greater than the actual gain over the whole period of ownership, tax is charged on the actual gain
  • If a loss arises using the 6 April 1965 value, and if this exceeds the actual loss over the whole period of ownership, only the actual loss is allowable.
  • If a gain arises using the 6 April 1965 value and an actual loss arose over the whole period of ownership (or vice versa) the disposal is treated as giving rise to neither a gain nor a loss.In each case, the gain or loss is the indexed gain or loss, that is the gain or loss after deducting indexation allowance. For disposals on or after 30 November 1993, indexation allowance can only reduce a gain - it cannot create or increase a loss.