Taxation of Chargeable Gains Act 1992 section 35A

Disposal of asset acquired on no gain/no loss disposal

Section 35A ensures that when an asset acquired between 1 April 1982 and 5 April 2008 through a no gain/no loss transfer is later disposed of, its base cost is rebased to its 31 March 1982 market value for capital gains tax purposes.

• This section applies to assets acquired after 31 March 1982 and before 6 April 2008 through a no gain/no loss disposal, where the 31 March 1982 rebasing rule did not originally apply to that transfer.
• A no gain/no loss disposal is one where, by law, no chargeable gain or allowable loss arises — for example, transfers between spouses or within a group of companies.
• When the asset is subsequently disposed of, the legislation treats the earlier no gain/no loss transfer as if the 31 March 1982 rebasing rule had applied to it, meaning the asset's base cost is taken to be its market value on 31 March 1982.
• The indexation allowance provisions for no gain/no loss disposals are also deemed to have applied to the earlier transfer, ensuring the indexation calculations are consistent with the rebased value.