Taxation of Chargeable Gains Act 1992 Schedule 3 paragraph 6

Apportionment of pre-1965 gains and losses

Schedule 3 paragraph 6 deals with how gains or losses on assets held before 6 April 1965 are adjusted when only part of the gain or loss is chargeable, so that the rebasing comparison under section 35 uses the time-apportioned amount rather than the full gain or loss.

• Where an asset was held on 6 April 1965, the gain or loss may be reduced by time-apportionment under Schedule 2 paragraph 16, so that only the portion of the gain or loss relating to the period after that date is chargeable.
• When comparing the old basis computation with the rebased (31 March 1982) computation under section 35, the old basis figure used is the time-apportioned amount, not the full historical gain or loss.
• If a valuation at 6 April 1965 applies — either because it is mandatory or because the taxpayer has elected for it — that value replaces original cost as the starting point for the old basis computation.
• The effect is to ensure that the section 35 rebasing comparison operates fairly where pre-1965 ownership has already reduced the chargeable element of the gain or loss.