Taxation of Chargeable Gains Act 1992 section 19

Deemed consideration in certain cases where assets disposed of in a series of transactions

Section 19 prevents connected persons from exploiting the market value rule by transferring assets individually through a series of transactions, where those assets are worth more collectively than the sum of their separate individual values.

• Where connected persons dispose of assets through two or more linked transactions within a six-year period, and the individual market value of assets in any transaction is less than their appropriate share of the total aggregate value, the disposal is deemed to take place at the higher appropriate portion of the aggregate value.
• Transfers between spouses or civil partners under section 58 are unaffected by these rules, and intra-group transfers between fellow group companies under section 171 are excluded from being treated as material transactions.
• The section applies each time a new material transaction creates or extends a series of linked transactions, and all necessary tax assessments and adjustments must be made on each such occasion.
• Where a company disposes of an asset it acquired via an inter-group transfer after 19 March 1985, and the disposal is to a person connected with the company that originally transferred the asset within the group, the disposal is treated as made by the original transferring company for the purpose of identifying a series of linked transactions — but any resulting increase in deemed consideration is taxed on the company actually making the disposal.