Taxation of Chargeable Gains Act 1992 Schedule 2 paragraphs 9–15

Land reflecting development value

Schedule 2 paragraphs 9 to 15 set out how chargeable gains are computed on disposals of UK land that carries development value and was held before 6 April 1965, replacing the normal time-apportionment method with a deemed disposal and reacquisition at 6 April 1965 market value, and defining key concepts such as current use value and material development.

• Where UK land with development value was held before 6 April 1965, the normal time-apportionment basis is replaced by a deemed sale and reacquisition at 6 April 1965 market value, which then becomes the base cost for computing any gain on a later disposal.
• Current use value is calculated as the market value of the land on the assumption that it would be unlawful to carry out any material development, except development already authorised by planning permission and begun before the relevant time.
• Material development means any change in the state, nature or use of land (including buildings), but a range of routine activities — such as maintenance, rebuilding within a ten per cent size tolerance, agricultural use, temporary car parking and changes of use within the same purpose class — are excluded from the definition.
• Detailed rules cover part disposals, leases (including wasting-asset leases), the treatment of premiums, reversions on post-17 December 1973 leases, and the date on which material development is treated as having begun.