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C2.602 Assets held on 31 March 1982—rebasing for corporation tax

The commentary in this article applies for corporation tax purposes. See C2.601A for the rules applying for capital gains tax purposes.

Where a company makes a disposal of an asset which it acquired on or before 31 March 1982, a special rule (known as 'rebasing') applies in computing the gain or loss. Rebasing generally applies to companies on an asset by asset basis. Exceptions to the rule apply to ensure, broadly, that rebasing does not increase the amount of a gain or loss. See C2.603. A company which is disadvantaged by an exception may make an election to apply rebasing to all disposals. See C2.604.

The effect of rebasing is that the market value of the asset on 31 March 1982 is deducted in the computation instead of the acquisition cost. Incidental costs of acquisition are also excluded from the computation as is any expenditure on enhancement or on preservation or establishing title within TCGA 1992, s 38(1)(b) which was incurred before