For a gain or loss to be within the scope of tax on chargeable gains, there must be a chargeable disposal of a chargeable asset by a chargeable person. See C1.104, C1.103 and C1.102 respectively.
Individuals, trustees and personal representatives are subject to capital gains tax on chargeable gains. Companies are subject to corporation tax on chargeable gains. See C1.102.
This article discusses the anti-avoidance rules that apply where a disposal is made to a connected person and a loss arises. These losses are known as 'clogged losses'. For details of the computation of chargeable gains and losses, see C1.105.
For an overview of allowable capital losses, including how relief is given for allowable losses, see C1.106.
Summary of the anti-avoidance rules that relate to disposals to connected persons
There are a number of anti-avoidance rules in TCGA 1992, ss 18, 19 that apply where there is a chargeable disposal of a chargeable asset to a connected person:
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•ÌýÌýÌýÌý the disposal is deemed to take place at market value1. This means that
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