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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Land: valuation: undivided shares: example

TCGA92/S35 (2)

A and B inherit land in equal shares on the death of their parent in 1979.

In 2009 B gifts his 50% interest in the land to his son C.

ACQUISITION IN 1979

The land was acquired from the personal representatives at their acquisition value, Section 62 (4). A and B therefore each have an acquisition cost equal to 50% of the entirety value of the land at the date of death.

DEEMED DISPOSAL AND ACQUISITION ON 31.3.82 FOR REBASING PURPOSES: TCGA92/S35 (2)

At 31 March 1982 A and B are each deemed to sell and reacquire their own asset. This asset is an undivided 50% share of the land, the value of which is likely to be lower than 50% of the entirety value at the same date.

NON-ARM’S LENGTH DISPOSAL IN 2009

The disposal is to a connected person so the market value of the land is substituted for any consideration actually paid, TCGA92/S18 and TCGA92/S17. B has disposed of his own asset, an undivided 50% share in the land, the value of which is likely to be lower than 50% of the entirety value at the same date.