Taxation of Chargeable Gains Act 1992 section 35

Assets held on 31st March 1982 (including assets held on 6th April 1965)

Section 35 establishes the rebasing rules for capital gains tax and corporation tax, so that only gains or losses accruing since 31 March 1982 are brought into account when a person disposes of an asset they held on that date.

• When a person disposes of an asset they held on 31 March 1982, the gain or loss is generally calculated as if the asset had been sold and immediately reacquired at its market value on that date, ignoring any earlier acquisition cost.
• For corporation tax purposes, a "kink test" may restrict the rebasing rule where it would turn a gain into a loss or vice versa, or where a no gain/no loss provision applies; in such cases the disposal may be treated as producing neither a gain nor a loss.
• A company may make an irrevocable election to disapply the kink test, so that all its disposals covered by the election are computed solely by reference to 31 March 1982 market values; this election must generally be made within two years of the end of the accounting period of the first relevant disposal.
• For assets held since 6 April 1965 where the rebasing rule does not apply, the older Schedule 2 rules continue to have effect for corporation tax purposes; Schedule 3 contains supplementary provisions applicable to both capital gains tax and corporation tax.