Taxation of Chargeable Gains Act 1992 Schedule 3 paragraph 5

Assets derived from other assets

Schedule 3 paragraph 5 ensures that the 31 March 1982 rebasing rules can apply to an asset even if it was not itself held on that date, provided its value is derived from another asset that was held on that date.

• For capital gains tax purposes, assets held on 31 March 1982 can have their cost rebased to their market value on that date.
• Some assets derive their value from other assets — for example, a new asset created or converted from a previously held asset.
• Where a disposed asset was not itself held on 31 March 1982 but derives its value from an asset that was held on that date, the rebasing rules still apply with necessary modifications.
• This ensures that pre-1982 gains embedded in derived assets are not brought into the capital gains tax computation.