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Chapter CG72200

Document Cited authorities 1 Cited in Related
Vincent
Published date12 March 2016
Record NumberCG72200
CourtHM Revenue & Customs
IssuerHM Revenue & Customs
Special rule for small part-disposals TCGA92/S243

Where the land acquired under a compulsory purchase order was only part of a holding of land, and certain other conditions are satisfied, see below, the taxpayer can claim that the special rule in TCGA92/S243 should apply. If this treatment is claimed, and if the relevant conditions are satisfied, the consequences are as follows:

  • No gain arises.
  • The compensation received is deducted from the allowable expenditure on the entire holding.

On a later disposal, or part-disposal, of the remainder of the holding, only the reduced expenditure is taken into account, see however CG17360, regarding indexation allowance due on a later disposal.

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207 and for taper relief see CG17895P.

Conditions for small part-disposal TCGA92/S243 (1) & (4)

If the special rule for small part-disposals is to apply, all the following conditions must be satisfied:

  • The interest in the land must not be a wasting asset, see CG71141.
  • The market value of the land disposed of must be ‘small’. For the meaning of ‘small’ see CG57835. The comparison to be made is with the market value of the entire holding as defined below.
  • The owner must have taken no steps to make it known, by advertising or otherwise, that he is prepared to sell any part of the holding, but see below.

By advertising or otherwise

Any action taken by the taxpayer to make it known, by advertising or otherwise, that he was...

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