Corporation Tax Act 2010 section 208

Consideration

Section 208 deals with how the relievable amount is calculated when a company disposes of an asset at less than its market value, by applying the rules on deferred consideration from the Taxation of Chargeable Gains Act 1992.

• When a disposal is made at an undervalue, the rules in section 48 of TCGA 1992 (which deal with consideration due after the time of disposal) are applied to calculate the relievable amount.
• The full value of the consideration must initially be included in the computation, even if some of it is not yet received or is uncertain.
• A subsequent claim can be made to reduce the consideration if the right to receive any amount is contingent or if any part of the consideration turns out to be irrecoverable.
• Section 48 of TCGA 1992 normally applies to the calculation of a chargeable gain, but in this context it is applied instead to the calculation of the relievable amount.