Taxation of Chargeable Gains Act 1992 Schedule 3 paragraphs 1–2

Previous no gain/no loss disposals

Schedule 3 paragraphs 1 to 2 deal with how the 31 March 1982 rebasing rules apply when an asset has passed through one or more no gain/no loss transfers, including intra-group transfers, before being disposed of to a third party.

• Where every disposal of an asset since 31 March 1982 has been on a no gain/no loss basis, the eventual disposing company is treated as having held the asset on that date, enabling it to use the rebasing rules.
• For shares or securities transferred within a group, if on 31 March 1982 the shares actually formed part of a larger holding held by a different group company, a claim can be made to calculate the rebased market value by reference to that larger holding using a proportionate formula.
• The formula for the rebased market value is: market value of the larger holding on 31 March 1982 multiplied by the number of shares disposed of, divided by the total number of shares in the larger holding on that date.
• Where an asset has been acquired on or after 6 April 1988 through an intra-group no gain/no loss transfer, any election to disapply the "kink test" follows the asset from the transferor rather than the company making the eventual disposal, preventing groups from exploiting mismatched elections.