Taxation of Chargeable Gains Act 1992 Schedule A1 paragraph 10

Periods of limited exposure to fluctuations in value not to count

Paragraph 10 of Schedule A1 provides that periods during which an asset's exposure to fluctuations in market value has been significantly limited do not count towards the qualifying holding period for taper relief purposes.

• If arrangements are in place that substantially limit the asset holder's exposure to changes in the asset's market value, that period does not qualify as part of the holding period for taper relief.
• This rule targets situations where hedging, insurance, options, or similar arrangements effectively protect the holder from downside risk (or upside gain), meaning the holder does not bear genuine economic exposure to the asset.
• The provision is an anti-avoidance measure designed to prevent taxpayers from claiming taper relief for periods when they were not truly at risk from movements in the asset's value.
• Only periods during which the holder has genuine, unrestricted exposure to fluctuations in the asset's value will count towards building up taper relief entitlement.