CG11700 - Introduction and computation: chargeable assets

Capital Gains Tax: what you pay it on, rates and allowances on Gov.uk provides an broad overview of chargeable assets.

Chargeable assets are assets that may give rise to a chargeable gain or an allowable loss. states that for the purposes of the TCGA all forms of property are assets wherever they are situated are including:

  • options, see CG12300P
  • futures, see CG56000P
  • debts, see CG53400P
  • incorporeal property, sometimes known as 鈥榠ntangible assets鈥�, see CG12000P. This covers assets with no physical substance, such as goodwill, copyright, patents and other types of intellectual property.
  • any currency other than sterling (the sterling being simply the unit of measurement of value), see CG78300P
  • created property such as business or professional goodwill, copyright or a lease (by the granting of it)
  • land and leases, see CG70205
  • shares and securities, see CG50200C.
  • rights over property

Guidance on the intangible assets regime for corporate businesses is given in the Corporate Intangibles and Research & Development Manual. The regime applies in respect of gains and losses arising to companies on intangible fixed assets that were acquired from an unrelated party or which came into existence on or after 1 April 2002. It does not apply to persons within the charge to Capital Gains Tax on chargeable gains.

Assets exempt in any circumstances

Although all forms of property, including debts and incorporeal property, are generally assets on which gains may accrue, see , there are some sections of the TCGA which state that gains which accrue on the disposal of certain limited classes of asset are not 鈥榗hargeable gains鈥� and so those gains are not within the scope of the main charging provisions of the Act. This also means that where losses instead of gains arise on such assets, those losses are not allowable losses, s16(2).

Some assets are always exempt of a capital gains charge irrespective of how they were acquired. For example:

补)听Private motor vehicles, see and CG76906

产)听Chattels with disposal consideration less than 拢6,000, see and CG76550C

肠)听Chattels with a predictable life of 50 years or less (unless used for the purposes of a trade, profession or vocation), see and CG76550C

诲)听Personal compensation or damages - sums obtained by way of compensation or damages for any wrong or injury suffered by an individual in his person or in his profession or vocation are not chargeable gains, see and CG13030P.

别)听Personal equity plans and individual savings accounts, see and SAIM2310+.

蹿)听Gilt-edged securities, see , and CG54900+

驳)听Savings certificates and non-marketable securities issued by the Department of National Savings, see . The exemption covers

路听听听听听听听听 Savings certificates (fixed interest)

路听听听听听听听听 Savings certificates (index-linked)

路听听听听听听听听 Yearly plan certificates

路听听听听听听听听 Children鈥檚 bonus bonds

路听听听听听听听听 Ulster savings certificates

路听听听听听听听听 Premium Bonds.

丑)听Qualifying corporate bonds, see and CG53700C

颈)听Any option or contract to acquire or dispose of gilt-edged securities or qualifying corporate bonds

箩)听Business expansion scheme shares 鈥� see and CG56900+.

办)听SAYE (Save as you earn) schemes - see and SAIM2300.

濒)听Stock Lending - see and CFM74140.

尘)听Housing Associations - Chargeable gains which accrue to an approved housing association on property occupied by a tenant of the association are not charged to corporation tax on the association. The association must claim this treatment for each accounting period in which it is to apply, see and CTM40405+.

苍)听Self-build societies - see and CTM40470.

辞)听Annuities -听

路听听听听听听听听 No chargeable gain shall accrue to any person on the disposal of a right to, or to any part of, an annuity or lump sum payable out of a superannuation fund, see [CE(BA&I1]听).

路听听听听听听听听 No chargeable gain accrues on a disposal of, or of an interest in, an annuity (except a deferred annuity) which is granted in the ordinary course of a business of granting annuities on the life of any person, see and CG69040P.

路听听听听听听听听 No chargeable gain accrues on a disposal of, or of an interest in, an annuity granted or deemed to be granted under the , see .

p)听Deed of covenant - No chargeable gain shall accrue on the disposal of a right to, or to any part of, annual payments under a deed of covenant (which are not secured on property), see . The exemption is restricted to unilateral binding obligations, entered into without consideration, under which the annual payments are not secured on any property, see Rank Xerox Ltd v Lane 53TC185.

This list may not be exhaustive. If you encounter a scenario not covered in this list, it is important to consider whether the statute and guidance in this manual provides an answer.

Gains accruing on disposals of qualifying corporate bonds and other forms of debt issued by companies may be charged as income, see CG54100 and (for advice on the Corporation Tax treatment of debts) CFM3000+.

Assets that are sometimes exempt

There are some occasions where the disposal of an asset is exempt in the hands of one person, but chargeable in the hands of another. The difference lies in how and/or why the owner acquired the asset concerned.

补)听Currency in sterling is not an asset for capital gains purposes, see . It is the unit by reference to which capital gains are measured.

产)听Foreign currency - Under , foreign currency that is sold by an individual at a profit does not give rise to a chargeable gain if it was acquired by for personal use outside the United Kingdom by the individual concerned or a family member, or on foreign currency bank accounts for whatever purpose the account is held. This includes expenditure on the provision or maintenance of any residence outside the United Kingdom. This exemption applies only to gains on foreign currency. Apart from this, currency (which includes foreign currency banknotes and foreign travellers鈥� cheques) is a chargeable asset, see CG78300P.

肠)听Life insurance policies and deferred annuities - see and CG69050+.

诲)听Decorations for valour - see and CG76875.

别)听Windfalls - under , winnings from betting (including pool betting or lotteries or games with prizes) are not chargeable gains, and rights to winnings obtained by participating in any pool betting or lottery or game with prizes are not chargeable assets. For example, a gain or loss realised on the purchase of a share in the winnings of a ticket which has drawn a horse in a sweepstake is outside the scope of the tax. Where the prize takes the form of an asset, it should be regarded as having been acquired by the 鈥榳inner鈥� at its market value at the time of acquisition.

f)听Heritage property - see and CG73300P.

驳)听Debts -No chargeable gain accrues on the satisfaction or the disposal of a debt by the original creditor or his or her personal representative or legatee, unless it is

the 鈥榙ebt on a security鈥�, see or a debt owed by a bank which is not in sterling, see , see CG53400P and CG78334+.

丑)听Only or main residence 鈥� see to s226B and CG64200C.

This list may not be exhaustive. If you encounter a scenario not covered in this list, it is important to consider whether the statute and guidance in this manual provides an answer.