Taxation of Chargeable Gains Act 1992 Schedule 4ZZC paragraphs 11–15

Computation of residential property gains and losses on relevant high value disposal within Case 1, 2 or 3 (and no election made)

Paragraphs 11 to 15 of Schedule 4ZZC set out how to calculate residential property gains and losses when a relevant high value disposal falls within Case 1, Case 2 or Case 3, and no election has been made to use an alternative computation method.

• Where a relevant high value disposal falls within one of the three Cases, the chargeable gain or allowable loss must be computed using specific apportionment rules rather than the standard CGT computation.
• The computation works by splitting the overall gain or loss on the disposal into an ATED-related portion and a non-ATED-related portion, based on the proportion of the ownership period during which the property was subject to the annual tax on enveloped dwellings (ATED) regime.
• In Cases 1 and 2, the gain or loss is time-apportioned by reference to the number of days in the ATED-related ownership period compared with the total ownership period, producing the ATED-related gain or loss.
• Case 3 applies where there has been a 5 April 2013 rebasing, and the computation is adjusted to reflect the rebased market value at that date rather than the original acquisition cost.

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