Taxation of Chargeable Gains Act 1992 Schedule 4A paragraph 9

Character of deemed disposal

Schedule 4A paragraph 9 establishes how the deemed disposal of underlying settled property assets is to be characterised for capital gains tax purposes, specifying both the consideration and the nature of the transaction.

• The deemed disposal is treated as being made for a consideration equal to the market value of the assets concerned, or a corresponding proportion of that value where only a partial interest is disposed of.
• The deemed disposal is treated as a transaction carried out at arm's length, meaning it is taxed as though it were a commercial deal between unconnected parties.
• Where the disposal takes place over a period of time and the asset values change during that period, a special adjustment rule applies to the consideration figure.
• These rules ensure that the deemed disposal mirrors the tax treatment of a real open-market sale, preventing any understatement of the chargeable gain.