Taxation of Chargeable Gains Act 1992, section 21

Assets and disposals

Part II General Provisions relating to computation of gains and acquisitions and disposals of assets

(1)All forms of property shall be assets for the purposes of this Act, whether situated in the United Kingdom or not, including—

(a)options, debts and incorporeal property generally, and

[F61 (b)currency, with the exception (subject to express provision to the contrary) of sterling,F61]

(c)any form of property created by the person disposing of it, or otherwise coming to be owned without being acquired.

(2)For the purposes of this Act—

(a)references to a disposal of an asset include, except where the context otherwise requires, references to a part disposal of an asset, and

(b)there is a part disposal of an asset where an interest or right in or over the asset is created by the disposal, as well as where it subsists before the disposal, and generally, there is a part disposal of an asset where, on a person making a disposal, any description of property derived from the asset remains undisposed of.

Definitions used in section 21 4

property

(6) Sub-paragraphs (4) and (5) above apply for the purposes of paragraph (b) of sub-paragraph (1) above as they apply for the purposes of paragraph (a), reading “income” for “property".

Defined in Sch.5 para.2(6) · see it in the full Act

(a) the reference to “assets” were a reference to “property”, and

Defined in Sch.4ZA para.22(2) · see it in the full Act
assets

(a) the reference to “assets” were a reference to “property”, and

Defined in Sch.4ZA para.22(2) · see it in the full Act
asset

In this sub-paragraph “asset” includes part of an asset.

Defined in Sch.8B para.6(1) · see it in the full Act
the option

(a) a share option (“the option”) has been granted to an individual—

(i) in accordance with the provisions of a Schedule 4 CSOP scheme, and

(ii) by reason of the individual’s office or employment as a director or employee of a company, and

(b) shares (“the relevant shares”) are acquired by the exercise of the option.

Defined in Sch.7D para.11(3) · see it in the full Act

Cases considering section 21 6

Schofield v HM Revenue and Customs

[2012] EWCA Civ 927 · 11 July 2012Limits

Although options are assets for the purposes of the Act, that classification did not require the court to treat one option as a separate disposal generating an allowable loss. The composite transaction remained the relevant transaction (see paras [9]; [21]; [36]).

Trigg v HM Revenue & Customs

[2018] EWCA Civ 17 · 18 January 2018Defines

The court used the distinction between assets and sterling as non-asset currency as statutory context for the QCB exemption. (see para [4])

Hancock & Anor v Revenue & Customs

[2017] EWCA Civ 198 · 25 May 2017Defines

The court noted that debts are assets for capital gains tax purposes, providing the statutory background for the treatment of the loan notes. (see [17])

What each judgment says about section 21 is in the case-law panel in the full Act.

Amendments and notes

4 notes from legislation.gov.uk

Amendments

  1. F61S. 21(1)(b) substituted (19.7.2006) by Finance Act 2006 (c. 25), Sch. 12 para. 9

Modifications

  1. C87S. 21(2)(b) applied by 1970 c. 9, Sch. 3ZC para. 12(2) (as inserted (retrospective to 11.7.2019 and with effect in accordance with Sch. 7 para. 4(1)(a) of the amending Act) by Finance Act 2020 (c. 14), Sch. 7 para. 2)
  2. C88S. 21(2) applied (8.11.1995) by Atomic Energy Authority Act 1995 (c. 37), Sch. 3 para. 4(2)
  3. C89S. 21(2) applied by 1970 c. 9, Sch. 3ZB para. 14(5) (as inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 49 paras. 6, 8)