Taxation of Chargeable Gains Act 1992 Schedule 4 paragraph 1

Reduction of deduction or gain

Schedule 4 paragraph 1 provides for "halving relief", which reduces by half certain deferred gains that originated from assets held on 31 March 1982.

• Where a gain on an asset owned on 31 March 1982 was deferred (through roll-over relief, hold-over relief or postponement) before 6 April 1988, and that gain is subsequently recovered on or after 6 April 1988, halving relief applies.
• The relief works by reducing the deferred gain to one half of what it would otherwise be.
• The reduction applies both where the deferral mechanism reduced the base cost of a replacement asset and where it postponed the gain until a later triggering event.
• The relief recognises that part of the original gain may relate to the period before 31 March 1982 and therefore should not be subject to capital gains tax in full.