A charge to capital gains tax arises when a chargeable person makes a chargeable disposal of a chargeable asset. The disposal may produce a taxable profit (known as a gain) or an allowable loss. This document provides the standard capital gains tax proforma and exceptions to the standard proforma. It also covers the rules on part disposals, transactions involving connected persons and gifts.

Points discussed within this guidance note:

> Standard capital gains tax proforma

Changes were introduced in FA 2008 to simplify the way in which capital gains tax is calculated for non-corporates (ie individuals and trustees) from 2008/09 onwards. The standard proforma for calculating the chargeable gain on the disposal of chargeable assets from 6 April 2008 onwards is a basic calculation of the  cash profit which this note sets out.

>> Allowable deductions from the proceeds

> Exceptions to the standard proforma

In a number of circumstances the standard proforma must be amended to reflect different provisions applying to  certain types of disposal, including where the asset was originally acquired on or before 31 March 1982. This note sets out calculation examples.

>> Assets held on 31 March 1982

>> How do you find the market value on 31 March 1982?

>> Post-transaction valuation check

> Part disposals

>> Adjustment to enhancement expenditure for part disposals

> Transactions involving connected persons

>> Definition of ‘connected persons’

>> Deemed proceeds

>> Losses on disposals to connected persons

> Gifts 

>> Valuations

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