CG14970 - Deferred consideration: unascertainable: future payments when received
»Ê¹ÚÌåÓýappre will be an occasion of charge when each future payment is received. This should be treated as a disposal or part-disposal of the right to receive the future payments. »Ê¹ÚÌåÓýapp acquisition cost of the right is the value of the right which has been brought into the original disposal computation.
Where losses accrue on disposals of certain rights on or after 10 April 2003 individuals and others within the charge to capital gains tax (but not companies within the charge to corporation tax) may elect to set off the loss in earlier years, see CG15080+.
Where a series of payments is received this will form a series of part-disposals. »Ê¹ÚÌåÓýapp value of the remaining right at each date will need to be ascertained to use the part-disposal formula. »Ê¹ÚÌåÓýappse valuations can be obtained in the same way as the original valuation of the right, see CG14950.
»Ê¹ÚÌåÓýapp disposal (or part-disposal) of the right will not be eligible for any relief which was due (or claimed) on the disposal of the original asset.
EXAMPLE 1
A company sells business premises for consideration consisting of cash plus a right to unascertainable future consideration. It acquires replacement premises and claims roll-over relief under TCGA92/S152, see CG60250+.
Roll-over relief will not be available to the company on the later disposal of the right. »Ê¹ÚÌåÓýapp right is not a qualifying asset for rollover relief purposes, see CG60410.
EXAMPLE 2
An individual disposes of a business for consideration which includes a right to unascertainable future consideration. »Ê¹ÚÌåÓýapp disposal qualifies for Business Asset Disposal Relief under TCGA92/S169H, see CG63950+.
»Ê¹ÚÌåÓýapp later disposal of the right will not qualify for further relief.
Where however, the right was acquired on a sale of shares or debentures TCGA92/S138A may result in TCGA92/S135 operating so that the no disposal/same asset treatment of TCGA92/S127 applies, with the necessary adaptations, to the exchange of the shares or debentures for the right. »Ê¹ÚÌåÓýappre is guidance on TCGA92/S138A at CG15020 and CG58000+ and on TCGA92/S135 at CG52500+.