188体育

Where the consideration for a disposal exceeds the 鈥榯hreshold amount鈥� (see CG73620) by only a marginal amount, and the ATED-related gain on the disposal is relatively large compared with the disposal consideration, the capital gains tax liability could have a distorting effect. In extreme cases the seller could save money by reducing the selling price below the threshold amount, eliminating any liability to pay capital gains tax. To prevent this distorting effect occurring, TCGA92/S2F provides a form of 鈥榯apering relief鈥�.

Under the section the ATED-related chargeable gain is restricted to an amount which is the lower of鈥�

• the full ATED-related gain and
• 5/3 times the difference between the consideration for the disposal and the threshold amount for that disposal.

Where only a proportion of the gain (the 鈥榬elevant fraction鈥�) is an ATED-related gain, the amount excluded from charge is reduced by the same proportion.

Example

The consideration for a disposal is 拢2.6 million and threshold amount for that disposal is 拢2 million.

5/3 of the difference between these figures (拢0.6 million) is 拢1 million. If the whole of the gain on the disposal is ATED-related, the chargeable gain is capped at 拢1 million. If only part of the gain is ATED-related, say 4/10, the 鈥楢TED-related鈥� chargeable gain is capped at 4/10 脳 拢1 million = 拢400,000.

The gain that is not ATED-related is unaffected by any restriction on the amount of the ATED-related chargeable gain.