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HMRC internal manual

Capital Gains Manual

Land: disposals: unascertainable deferred consideration: computation of capital gain

The value of the right to receive the future amounts is to be included in the consideration for the disposal the land. This principle was established in two tax cases, Marson v Marriage 54TC59 and Marren v Ingles 54TC76.

Both of the cases referred to in CG72870 concerned agreements for the sale of assets in which the vendor received a quantified amount of money plus a conditional and unquantifiable further amount payable at an uncertain future date. The point in dispute in both cases was whether any chargeable gain arose when the further amounts were received.

In Marson v Marriage, Justice Fox decided that TCGA92/S48 applies when the sum to be brought into account represents ascertainable consideration even when the right to it is contingent. It does not apply when the amount is unascertainable. In Marren v Ingles, a number of principles were established

  • the right to receive future unascertainable receipts is a ‘chose in action’. This is an incorporeal asset which is a chargeable asset for Capital Gains Tax purposes;
  • when the future amounts are ascertained and received they are capital sums derived from assets within TCGA92/S22; and
  • the future sums received are not payments in satisfaction of a debt within the terms of TCGA92/S251.