Taxation of Chargeable Gains Act 1992 section 17

Disposals and acquisitions treated as made at market value

Section 17 provides that certain acquisitions and disposals of assets must be treated as taking place at market value, even if the actual consideration given or received is different.

• Where an asset is acquired or disposed of other than at arm's length — for example by gift, transfer into a trust, or company distribution — the transaction is deemed to take place at market value for capital gains purposes.
• Market value is also substituted where the consideration cannot be valued, or where the transaction is connected with loss of office, reduction in earnings, or recognition of services.
• The market value rule does not apply to an acquisition where there is no corresponding disposal and there is either no monetary consideration or the consideration is below market value.
• The effect is to prevent taxpayers from using non-arm's length transactions to manipulate the consideration figure and thereby reduce or eliminate chargeable gains.