SCHEDULES
SCHEDULE 4ZZC

Disposals of residential property interests: gains and losses
PART 3

RPI disposals involving relevant high value disposals

Computation of residential property gains and losses on relevant high value disposal within Case 1, 2 or 3 (and no election made)
11
1
This paragraph applies to a relevant high value disposal where—
a
the disposal falls within Case 1, 2 or 3 in paragraph 2 of Schedule 4ZZA, and
b
P has not made an election under paragraph 5 of that Schedule in respect of the asset.
2
The residential property gain or loss accruing on the relevant high value disposal is computed in accordance with paragraphs 12 to 15.
3
In those paragraphs “
the relevant year
” means—
a
where the relevant high value disposal falls within Case 1 in paragraph 2 of Schedule 4ZZA, 2013,
b
where it falls within Case 2 in that paragraph, 2015, and
c
where it falls within Case 3 in that paragraph, 2016.
12
1
Take the following steps—
- Step 1
Determine the amount equal to the special fraction of the notional pre-ATED gain or loss (as the case may be) (see paragraph 13).
- Step 2
Determine the amount equal to the special fraction of the notional post-ATED gain or loss (as the case may be) (see paragraph 14).
- Step 3
Add (treating any amount which is a loss as a negative amount)—
  1. the amount of any gain or loss determined under Step 1, and
  2. the amount of any gain or loss determined under Step 2.
2
If the result is a positive amount, that amount is the residential property gain on the relevant high value disposal.
3
If the result is a negative amount, that amount (expressed as a positive number) is the residential property loss on the relevant high value disposal.
13
1
This paragraph applies for the purposes of Step 1 in paragraph 12.
2
“
Notional pre-ATED gain or loss
” means the gain or loss which would have accrued on 5 April of the relevant year had the disposed of interest been disposed of for a consideration equal to the market value of the interest on that date.
3
The “special fraction” is—
SD/TD
where—
“SD” is the number of residential property chargeable days in the relevant ownership period;
“
TD
” is the total number of days in the relevant ownership period.
4
The “relevant ownership period” is the period—
a
beginning with the day on which P acquired the disposed of interest or, if later, 31 March 1982, and
b
ending with 5 April of the relevant year.
14
1
This paragraph applies for the purposes of Step 2 in paragraph 12.
2
“
Notional post-ATED gain or loss
” means the gain or loss which would have accrued on the relevant high value disposal had P acquired the disposed of interest on 5 April of the relevant year for a consideration equal to its market value on that date (and see paragraph 15).
3
The “special fraction” is—
SD/TD
where—
“SD” is the number of residential property chargeable days in the relevant ownership period;
“
TD
” is the total number of days in the relevant ownership period.
4
The “relevant ownership period” is the period beginning with 6 April of the relevant year and ending with the day before the day on which the relevant high value disposal occurs.
15
1
This paragraph applies for the purposes of computing the notional post-ATED gain or loss for the purposes of Step 2 in paragraph 12.
2
In determining whether the asset which is the subject of the relevant high value disposal is a wasting asset (as defined for the purposes of Chapter 2 of Part 2), ignore the assumption that the asset was acquired on 5 April of the relevant year.
3
Sections 41 (restriction of losses by reference to capital allowances and renewals allowances) and 47 (wasting assets subject to capital allowances) apply in relation to any capital allowance or renewals allowance made in respect of the expenditure actually incurred by P in acquiring or providing the asset as if that allowance were made in respect of the expenditure treated as incurred by P on 5 April of the relevant year.
Sch. 4ZZC inserted (with effect in accordance with s. 83(17) of the amending Act) by Finance Act 2016 (c. 24), Sch. 12 para. 5