What capital gains tax relief does section 264 TCGA 1992 provide when parliamentary constituency boundaries are redrawn?

Section 264 provides no-gain, no-loss treatment when local constituency associations transfer land directly to successor associations following boundary changes under an Order in Council. This means neither a chargeable gain nor an allowable loss arises, and the successor association inherits the original base cost of the land.

How does roll-over relief apply when a constituency association sells land and passes the proceeds to a successor association?

Where an existing association sells land used for its functions and passes sale proceeds to a successor association, the successor is treated as having owned and disposed of the land itself. This enables the successor association to claim roll-over relief under sections 152 to 158 if it reinvests in qualifying replacement assets within the permitted time limits.

What happens if only part of the sale proceeds are transferred to a successor constituency association?

If only part of the proceeds is passed to a successor association, the relief is scaled back proportionately. The successor is treated as having owned an undivided share of the land equal to the fraction of total proceeds actually transferred. Only that proportionate share qualifies for roll-over relief; the remaining share falls outside the relief.

What qualifies as a local constituency association and a successor association under section 264?

A local constituency association is an unincorporated association whose main purpose is advancing a political party's aims in an area matching one or more parliamentary constituencies. A successor association is a new association whose area corresponds to a newly created constituency and includes any part of the former existing association's area.

Taxation of Chargeable Gains Act 1992 section 264

Relief for local constituency associations of political parties on reorganisation of constituencies

Section 264 provides capital gains tax relief when local constituency associations of political parties transfer land as a result of parliamentary boundary changes, ensuring that such reorganisations do not trigger unexpected tax charges.

When parliamentary boundaries are redrawn by Order in Council, existing local constituency associations may need to transfer land to newly formed successor associations covering the redrawn areas
Direct transfers of land from an existing association to a successor association (or via an intermediate party body) are treated on a no-gain, no-loss basis, so no chargeable gain or loss arises on the transfer
Where an existing association sells land it used for its functions and passes all or part of the sale proceeds to a successor association, roll-over relief under sections 152 to 158 may apply as if the successor association had owned and disposed of the land itself
If only part of the sale proceeds is passed to a successor association, the relief applies proportionately, based on the fraction of total proceeds actually transferred

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