Taxation of Chargeable Gains Act 1992 section 279A

Deferred unascertainable consideration: election for treatment of loss

Section 279A allows a taxpayer who realises a capital loss on the disposal of a right to deferred unascertainable consideration to elect for that loss to be treated as arising in an earlier tax year, so that it can be set against chargeable gains that arose in that earlier year.

• Where a taxpayer disposes of a right to deferred unascertainable consideration at an allowable loss, they may elect to have that loss treated as accruing in an earlier tax year rather than the year it actually arose, provided certain conditions are met.
• The right must have been received as consideration for an earlier disposal of another asset (the original asset), must not have been acquired second-hand, and must relate to consideration that was unascertainable at the time of the original disposal.
• Condition 1 requires that a chargeable gain arose (or would have arisen but for EIS or VCT reinvestment relief) on the original disposal or on another disposal of the original asset in a relevant year.
• Condition 2 requires that there is an eligible earlier year (no earlier than 1992–93) in which such a chargeable gain accrued and for which the taxpayer still has a residual capital gains tax liability that has not already been eliminated by previous elections under this section.