CG17928 - Taper relief: relevant period of ownership: examples
EXAMPLE 1
Relevant period of ownership is last 10 years of qualifying
holding period.
Asset acquired 1 May 1998.
Asset disposed of 1 May 2015.
The relevant period of ownership is the shorter of
- the period after 5 April 1998 = 17 years
(1 May 1998 - 1 May 2015)
and
- the last 10 years ending at disposal = 10 years of the asset (1
May 2005 - 1 May 2015)
The relevant period of ownership will therefore be 10 years.
NOTE. The qualifying holding period, see CG17900+, will be
17 years although this has no practical significance as the maximum
benefit from taper relief was achieved at 10 years in the case of
non-business assets and at 2 years for business assets disposed of
on or after 6 April 2002.
EXAMPLE 2
Relevant period of ownership where qualifying holding period
includes bonus year.
Non-business asset acquired 1 March 1995.
Asset disposed of 6 April 2007.
The relevant period of ownership is the shorter of -
- the period after 5 April 1998 = 9 years
(6 April 1998 - 6 April 2007)
and
- the last 10 years ending at disposal = 10 years of the asset
(6 April 1997 -6 April 2007)
The relevant period of ownership will therefore be 9 years.
NOTE. The qualifying holding period, see CG17900+, will be
10 years (9 years post 5 April 1998 and the bonus year as the asset
was held at 17 March 1998 and also 5 April 1998).
EXAMPLE 3
Relevant period of ownership to be restricted because of
excluded period.
Non-business asset acquired 1 May 1988.
Asset disposed of 6 April 2007.
On 6 April 2005 the taxpayer entered into an arrangement to
restrict his exposure to changes in value of the asset. The
transaction is caught by TCGA92/SCHA1/PARA10, see CG17915. The
transaction had effect until the asset was finally disposed of on 6
April 2007.
The relevant period of ownership is the shorter of -
- the period after 5 April 1998 = 9 years
(6 April 1998 - 6 April 2007)
LESS excluded period
(Para 2(4)(b)(ii) Sch A1 TCGA 1992)
(6 April 2005 - 6 April 2007) = 2 years
7 years
and
- the last 10 years ending at disposal = 10 years
of the asset but without taking into account the excluded period
(6 April 2005 - 6 April 2007)
Paragraph 2(4)(b)(i) Schedule A1 TCGA 1992 requires the
excluded period to be left out of account in computing the period
of ten years up to the date of disposal.
The relevant period of ownership is therefore 7 years.
NOTE. The qualifying holding period, see CG17900+, is
similarly restricted so as to exclude the Paragraph 10 Schedule A1
TCGA 1992 period and will be 8 years (ownership post 5 April 1998,
9years, less excluded period TCGA92/SCHA1/PARA2(4)(a), 2 years plus
bonus year).
Example 4
Relevant period of ownership begins more than 10 years
before the time of disposal because of excluded period.
Shares (Non-business asset) in a close company acquired 1
May 1988.
Shares disposed of 1 May 2012. The company is close
throughout.
Between 1 October 2007 and 30 September 2009 the company is
inactive. The transaction is caught by TCGA92/SCHA1/PARA11A, see
CG17921.
The relevant period of ownership is the shorter of -
- the period after 5 April 1998 = 14 years
(1 May 1988 - 1 May 2012)
LESS excluded period
(Para 2(4)(b)(ii) Sch A1 TCGA 1992)
(1 October 2007 - 30 September 2009) = 2 years
12 years
and
- the last 10 years ending at disposal = 10 years
of the asset but without taking into
account the excluded period (1 October 2007 - 30 September
2009)
Paragraph 2(4)(b)(i) Schedule A1 TCGA 1992 requires the
excluded period to be left out of account in computing the period
of ten years up to the date of disposal.
The relevant period of ownership is therefore 10 years.
NOTE. In this example the relevant period of ownership is a
combination of the period from 1 October 2009 to 1 May 2012 and 1
May 2000 to 30 September 2007. This is 10 years ending with the
disposal but excluding the para 11A period.
