CGT: Date of acquisition or disposal 'At a glance'

When is the date of disposal for Capital Gains Tax (CGT) purposes? When do special rules apply? Why does it matter?

This is a freeview 'At a glance' guide.

For more details see our subscriber guide CGT: Date of acquisition or disposal.

At a glance

What is the date of disposal for Capital Gains Tax (CGT)?

The general rule is that:

• The time at which a disposal and acquisition are made is the time the contract is made (i.e. exchange). It is not, if different, the time at which the asset is conveyed or transferred (completion).
• If a contract is conditional, the time at which the disposal and acquisition are made is the time when the conditions are satisfied.

A contract:

• May generally be made verbally or in writing.
• In respect of a conveyance of land and property must be executed in writing.

Special rules which disapply the general rule

These include: 

• Where there is a disposal but no acquisition, which involves a capital sum derived from an asset. See Date of disposal.
• Where an asset is entirely lost, destroyed, dissipated, or extinguished. See Date of disposal.
• Where an asset has become of Negligible value: when a negligible value claim is made.
• Where land is acquired under Compulsory purchase powers. 
• Debts. See Date of disposal.
• When there is a gift, transfer to a settlement or transfer from a settlement. See Date of disposal.
• On liquidation or striking off. See Distributions & Striking Off.
• Acquisition of a private residence for Private Residence Relief (PRR) purposes.
• Insolvency and bankruptcy.

For more detail on these, and other special cases, see CGT: Date of acquisition or disposal

Why does the date of disposal matter?

The date of disposal determines which tax year a disposal falls into which affects:

• When the disposal must be declared.
• When the tax is due for payment.
• What annual exemption is available.
• What tax rate applies.
• For disposals by companies prior to 31 December 2017, what the indexation allowance is.

The date of disposal determines the tax point which affects:

• The end or start date to determine whether the conditions of certain reliefs are met.
• What the acquisition date is.

There are also special rules in respect of CGT and deferred considertion and earn-outs

The date of disposal is also important for various reliefs such as:

• Losses, trade losses and sideways relief
• Business Asset Disposal Relief (Entrepreneurs' Relief)
• Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) relief
• Rollover/holdover Relief
• Purchase of own shares

This guide looks at the relevant date for CGT only.

• For VAT see Time of Supply
• For capital allowances see Disposal values & rules
• For SDLT see SDLT: At a glance, Stamp Duty Land Tax, rates & allowances

Useful guides on this topic

CGT: Date of acquisition or disposal
When is the date of acquisition or disposal of an asset for Capital Gains Tax (CGT) purposes? When do special rules apply? Why does it matter?

At a glance: How to calculate CGT
How do you calculate a capital gain or loss? What costs are deductible? Can you offset losses against capital gains?