SolvedCG17000 | Rebasing for companies: halving relief for deferred gains pre-31/3/82: example
From HM Revenue & Customs · Capital Gains Manual
Farmland cost £5,000 on 1 September 1978.
Farmland sold for £15,000 on 1 June 1984.
Replacement farmland cost £24,000 on 1 March 1987.
Replacement farmland sold for £100,000 on 6 March 2013.
1984 Disposal
| - | - | - | £ |
|---|---|---|---|
| - | Disposal proceeds | - | 15,000 |
| less | Cost | - | 5,000 |
| - | Unindexed gain | - | 10,000 |
| less | Indexation | 5,000 x 0.123 | 605 |
| - | Gain | - | 9,385 |
Roll-over relief under CGTA79/S115 was claimed in respect of the 1984-85 capital gain so the allowable cost of replacement land becomes
£24,000 - £9,385 = £14,615 (CGTA79/S115 (1)(b)).
2013 Disposal
Relief under TCGA92/SCH4 is claimed: the reduction in the cost by £9,385 is made under one of the specified enactments and so this is reduced by 50% to £4,692 by Paragraph 1(a). The gain that arises in March 2013 is
| - | - | - | - | £ |
|---|---|---|---|---|
| - | Disposal proceeds | - | - | 100,000 |
| less | Cost (after roll-over relief) | - | 14,615 | - |
| - | Schedule 4 relief (50% of 9,385) | - | 4,693 | 19,308 |
| - | Unindexed gain | - | 30,692 | - |
| less | Indexation | 19,308 x 1.472 | - | 28,421 |
| - | Gain | - | - | 52,271 |