Taxation of Chargeable Gains Act 1992 Schedule 3 paragraph 4

Part disposals etc.

Schedule 3 paragraph 4 deals with how the rebasing rules interact with part disposals and certain expenditure disallowance provisions where an earlier part disposal took place between 31 March 1982 and 6 April 1988.

• Where a part disposal occurred after 31 March 1982 but before 6 April 1988, the remaining allowable expenditure for any later disposal must be recalculated using the asset's 31 March 1982 value rather than its original cost.
• The standard part disposal apportionment fraction B / (A + B) is applied to the 31 March 1982 value, where A is the consideration received on the part disposal and B is the market value of the part retained at that time.
• This ensures that the benefit of rebasing to 31 March 1982 values carries through to the computation of the gain or loss on the subsequent disposal of the retained part.
• Where certain provisions would disallow expenditure as a deduction because consideration was reduced on a disposal made between 31 March 1982 and 6 April 1988, the allowable deduction on the later disposal must still be reduced by the amount that would have been disallowed had rebasing not applied.