CG13130 - Introduction and computation: occasions of charge: assets lost/destroyed/negligible value: date of deemed disposal/reacquisition

Date of deemed disposal/reacquisition

The decision in Williams v Bullivant (56TC159) established the general rule that the date of the deemed disposal and reacquisition is the date of the claim. Any resulting loss thus arises at the date of the claim. The date of the claim is the date on which the claim is received by HMRC.

Where the asset has become of negligible value, the claimant may generally claim that the asset is deemed to have been disposed of and reacquired at the time of the claim or at an earlier time. An earlier time may be specified for the claim if

• the claimant owned the asset at the earlier time; and
• the asset had become of negligible value at the earlier time; and either
• for a person other than a company, the earlier time is not more than two years before the beginning of the year of assessment in which the claim is made, or
• in the case of a company, the earlier time is on or after the first day of the earliest accounting period ending not more than two years before the time of the claim.

However, an earlier time may not be specified if Sch 7AC Para 33 TCGA92 (exemptions for disposals by companies with substantial shareholdings) applies (see CG53210).

Indexation allowance

S24(2)(c) TCGA92 applies the indexation allowance rules by reference to the time of the claim, not the time of the deemed disposal.

NOTE: If a claimant is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008.

For companies within the charge to Corporation Tax, indexation was frozen from December 2017. For all assets held before 1 January 2018, but disposed of on or after this date, the percentage increase remains that used for December 2017.