Taxation of Chargeable Gains Act 1992 Schedule 7A paragraph 5

Alternative calculation by reference to market value

Schedule 7A paragraph 5 provides an alternative method of calculating a gain on the disposal of shares or securities, using market value at a specific date rather than original cost, where this produces a lower chargeable gain.

• Where shares or securities are disposed of and would otherwise give rise to a chargeable gain, the taxpayer may elect to calculate the gain by reference to the market value of the asset at a specified date rather than the original acquisition cost.
• This alternative calculation is only available where it produces a lower gain than the standard computation — it exists as a relief measure to reduce the chargeable amount.
• The market value used in the alternative calculation is determined at a particular reference date, and this value is substituted for the actual acquisition cost in the gain computation.
• The provision was introduced by Finance Act 1993 and subsequently amended by Finance Act 2011, reflecting changes to the capital gains rules for shares and securities over time.

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