Taxes Consolidation Act 1997 section 558

Part disposals before 6th day of April, 1978

Section 558 provides special rules for determining the base cost of the remainder of an asset where part of that asset was disposed of between 6 April 1974 and 5 April 1978.

• Where part of an asset held on 6 April 1974 was disposed of before 6 April 1978 and the gain was calculated using time apportionment, the base cost of the remaining part is recalculated as if it were the market value on 6 April 1974.
• Where part of an asset acquired on a death occurring on or after 6 April 1974 was disposed of before 6 April 1978, and the gain was calculated using a base cost from before the date of death, the base cost of the remaining part is recalculated as if it were the market value at the date of death.
• These notional recalculations do not alter the capital gains tax liability on the original part disposals made before 6 April 1978.
• The purpose of the recalculations is solely to establish the correct balance of allowable expenditure to be carried forward under section 557 for disposals of the remainder of the asset on or after 6 April 1978.