Taxation of Chargeable Gains Act 1992 Schedule 4ZZC paragraph 5

Computation of balancing gains and losses

Schedule 4ZZC paragraph 5 explains how to calculate any balancing gain or loss that arises when a person disposes of an asset to which the rebasing rules in this Schedule apply.

• When a rebased asset is disposed of, a balancing calculation compares the original base cost position with the rebased position to determine whether an additional gain or loss arises.
• A balancing gain arises where the use of the rebased value as the base cost has resulted in a smaller chargeable gain (or a loss) compared with what would have arisen under the original base cost.
• A balancing loss arises where the use of the rebased value has resulted in a larger chargeable gain (or a smaller loss) compared with the original base cost calculation.
• The balancing gain or loss is equal to the difference between the gain or loss computed on the rebased basis and the gain or loss that would have been computed using the original base cost.

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