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 the disposal and acquisition is made is the time the contract is made. It is not, if different, the time at which the asset is conveyed or transferred.
• If the contract is conditional (and in particular if it is conditional on the exercise of an option) the time at which the disposal and acquisition are made is the time when the condition is satisfied.

Contracts:

• A contract may be made verbally or in writing.
• In respect of a conveyance of land and property, a contract must be executed in writing.
  • If so, the date of disposal will be the date on which contracts are exchanged between the parties.

Special rules which disapply the general rule

• Acquisition of a private residence for Private Residence Relief (PRR) purposes. 
• Where there is a disposal but no acquisition, which involves a capital sum derived from an asset.
  • See Date of disposal.
• Where an asset has become of Negligible value: when a negligible value claim is made.
• Where a contract is conditional.
  • See Date of disposal for what rules apply to conditional contracts.
• When there is a gift or transfer to a settlement.
• On incorporation.
  • See Incorporating an existing business.
• On liquidation or striking off.
  • See Distributions & Striking Off.

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.
• For disposals by companies prior to 31 December 2017, what the indexation allowance is.

The date of disposal determines the tax point which affects:

• Which tax year the disposal falls into.
• The end or start date to determine whether the conditions of certain reliefs are met.
• What the acquisition date is.

This guide looks at the relevant date for capital gains tax 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

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

Useful guides on this topic

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

How to calculate CGT
This is a guide to how to compute a capital gain (or loss) for individuals and trustees.