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CG14653 | Assets disposed of: series of transactions: statutory provisions

From HM Revenue & Customs · Capital Gains Manual

Where these conditions are satisfied, any disposal to which (c) applies (and the corresponding acquisition) is deemed to be for a consideration equal to the ‘appropriate portion of the aggregate market value’.

  • If the transaction is the most recent in the series of linked transactions, the ‘original market value’ of assets disposed of in that transaction is the market value which, in the absence of TCGA92/S19, would be deemed to be the consideration for the purpose of Capital Gains Tax.

  • If it is an earlier transaction, the ‘original market value’ of the assets disposed of in that transaction is the value which, leaving aside the most recent transaction in the series, was or would have been deemed to be the consideration for the purposes of Capital Gains Tax, by the previous operation of Section 19 or any other provision.

The ‘aggregate market value’ of assets disposed of by all the transactions in a series of linked transactions is what would have been the market value for Capital Gains Tax purposes if all the assets taken together had been disposed of in one disposal occurring at the date of the transaction concerned. If the series involves more than two transactions, for each transaction you must consider the aggregate market value of the assets disposed of to date.

When considering all the assets together, you must consider them as a group or holding or collection of assets retaining their separate identities. But IN ADDITION, if it gives a higher market value, you must also consider them as brought together, physically or in law, so as to constitute either a single asset or a number of assets which are distinct from those which were comprised in each of the transactions concerned. For example, where in a series of two transactions there is the transfer of a leasehold interest followed by the transfer of the freehold reversion, the ‘aggregate market value’ is the market value of the unencumbered freehold.