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HMRC internal manual

Capital Gains Manual

Chattels: sets of assets: example

TCGA92/S262(4)

This example shows how to apply TCGA1992/S262(4), see CG76631 onwards.

The black pieces of an antique chess set are sold for £5,000 on 5 April 2011.  The gain is £4,000 and this is claimed as exempt under section 262, see CG76573.

On 7 April 2011, the white pieces of the set are sold, to the sister of the person who purchased the black pieces, for £5,000.  The gain is also £4,000 and, again, this is said to be exempt under section 262.

The two lots of pieces form a set and, as they have been sold to people who are connected persons, we use section 262(4) to treat them as one asset.  Only one £6,000 exemption is available and as the total consideration exceeds £6,000, the exemption isn’t available.

 However marginal relief is due so the computation is as follows:

  £
   
Total consideration 10,000
Excess (10,000 – 6,000) 4,000
   
The chargeable gain is the lessor of:  
Total gain 8,000
or Marginal relief (4,000 x 5/3) 6,667
   
Chargeable gain 6,667
Assessable 2010-11 3,334
Assessable 2011-12 3,333