What is the disposal date for capital gains tax when land is compulsorily purchased under section 246 TCGA 1992?

Under section 246 of the Taxation of Chargeable Gains Act 1992, where land is compulsorily acquired without a contract, the disposal date is the date on which the compensation amount is agreed between the parties or formally determined by the appropriate tribunal. This date fixes the tax year in which the gain or loss arises.

Does an appeal that changes the compensation amount alter the disposal date under section 246 TCGA 1992?

No. If the compensation amount is later varied on appeal, the disposal date remains the original date of agreement or determination. This provides certainty for both the landowner and the acquiring authority in computing their tax positions, even where the final compensation figure is not settled until a later date.

Why is a special rule needed for the timing of compulsory purchase disposals?

In normal property transactions, the disposal date is the contract date. However, compulsory purchases often involve no contract — the authority exercises statutory powers. Section 246 resolves this uncertainty by providing a clear rule that the disposal occurs when compensation is agreed or determined by a tribunal.

Does section 246 apply to all compulsory land acquisitions in the United Kingdom?

Section 246 applies only where the acquiring body is an authority possessing compulsory purchase powers and the acquisition is not made under a contract. Where these conditions are met, both the disposal date for the landowner and the acquisition date for the authority are fixed as the date compensation is agreed or determined.

Taxation of Chargeable Gains Act 1992 section 246

Time of disposal and acquisition

Section 246 establishes when a disposal and acquisition is treated as taking place for capital gains tax purposes where land is compulsorily purchased.

Where land is compulsorily acquired (not under a contract), the disposal date is the date on which the compensation amount is agreed or formally determined.
The acquisition date for the acquiring authority is the same date as the disposal date.
If the compensation amount is later varied on appeal, this does not change the disposal or acquisition date — the original agreement or determination date still applies.
This rule only applies where the acquiring body is an authority possessing compulsory purchase powers.

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