Taxation of Chargeable Gains Act 1992 section 242

Small part disposals

Section 242 provides a mechanism allowing taxpayers to elect that small part disposals of land are not treated as disposals for capital gains purposes, provided certain value and monetary thresholds are met.

• Where part of a land holding is transferred and the consideration does not exceed one-fifth of the market value of the whole holding and is no more than £20,000, the transferor can claim that the transfer is not treated as a disposal
• If the claim is made, the consideration received is instead deducted from the allowable cost base of the remaining holding, deferring any gain until a future disposal
• The relief is unavailable if total consideration for all land disposals by the transferor in the same tax year exceeds £20,000, though compulsory purchase part disposals under section 243 are disregarded for this limit
• Claims must be made within 21 months of the end of the tax year for capital gains tax purposes, or within two years of the end of the accounting period for corporation tax purposes