Taxation of Chargeable Gains Act 1992 Schedule 11 paragraph 11

Assets acquired on disposal chargeable under Case VII of Schedule D

Schedule 11 paragraph 11 deals with how the acquisition cost of assets is determined for capital gains tax purposes where those assets were previously subject to a disposal chargeable under the former Case VII of Schedule D (which taxed short-term gains on land).

• A disposal chargeable under Case VII is one where the gain accruing on it was (or would have been, had there been a gain) chargeable under Case VII of Schedule D.
• The acquisition cost of an asset obtained through a Case VII disposal cannot be treated as greater than the consideration figure used for Case VII purposes — this prevents the acquirer from claiming an inflated base cost for future capital gains calculations.
• Any apportionment of consideration or expenditure made for Case VII purposes — including cases where adjoining land was acquired to enhance the value of other land — must also be followed when computing chargeable gains on a later disposal of that asset, or of any remaining part where the Case VII disposal was a part disposal.
• This apportionment rule applies even where it conflicts with the general rules in section 52(4) of the Taxation of Chargeable Gains Act 1992 regarding the treatment of consideration.

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