CG73982 - NRCG and the exemptions: Disposals from 6 April 2019: Other specific provisions

TCGA92|Sch4AA paras 18 to 24

Companies with UK land becoming UK resident after 5 April 2019

Where a company migrates to the UK and becomes resident after 5 April 2019, any previous entitlement to rebasing of the asset for the purposes of computing the gain on a disposal is preserved.

 

Persons with UK land held on 5 April 2019 ceasing to be UK resident after 5 April 2019

Where a company or a trust ceases to be resident in the UK after 5 April 2019 an exit charge is not triggered in relation to UK land that was held on 5 April 2019. The exit charges would continue to apply in respect of other assets.

On a subsequent disposal of the UK land (held on 5 April 2019) the computational rules in Sch4AA do not apply to that subsequent disposal and any gain or loss is computed on normal rules i.e. the gain accruing over the whole period of ownership is brought into charge on the subsequent disposal.

Example

UK trust only holds a UK property. Cost £200,000 5/2017.

Trust ceases to be UK resident 5/2022. UK property is disposed of 5/2024 for £400,000.

On exit 5/2022 para 17 sch4AA applies and there is no deemed disposal under S80/TCGA92.

On disposal 5/2024 a gain of £200,000 arises that will be chargeable for the 2024/2025 year.

Further guidance on the interactions with exit charges is within CG73988.

 

Wasting assets

Where a rebasing date is used in accordance with Sch4AA e.g. 5 April 2019, that date is not to be used for the purposes of determining if an asset is a wasting asset under Chapter 2 Part 2 TCGA 92.

Capital allowances

If a valuation is used in accordance with Sch4AA to determine the deemed acquisition cost, that valuation should also apply for the purposes of capital allowance purposes in TCGA92/S41 and S47.

Making and varying of elections

An election must be made in the person’s tax return.  If no election is made, the default rebasing rules will apply.

An election is irrevocable if made in a person’s normal tax return.  If it is made in a return relating to the payment on account rules in Schedule 2 to Finance Act 2019, the election may be withdrawn or a new election made in a subsequent tax return (if that return is made on time).