A: If the total sale proceeds are not received immediately. Section 48 TCGA 1992 broadly requires the full amount of the consideration to be brought into the CGT computation, whether it is ascertainable, ascertainable but contingent on a future event or not ascertainable. In the latter scenario, the right to receive the future payments is the consideration.
Future ascertainable consideration is included in the disposal proceeds at its ordinary monetary value. There are then no additional tax consequences when the future amounts are received, although relief can be claimed if part or all of the deferred consideration is not eventually received.
The inclusion of ascertainable deferred consideration in the CGT computation might mean that the taxpayer does not have the funds to pay the tax due. Section 280 TCGA 1992 provides for the tax due to be paid by instalments if certain conditions are met.
Payment of CGT by instalments is not appropriate in a situation involving unascertainable deferred payments. In such cases, the taxpayer receives and is assessable on the value of an asset, this being the right to receive future payments. This asset itself is not received in instalments.
All of these situations, with worked examples, are articulated in detail in the HMRC Capital Gains Manual. An index to the guidance can be found at:
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
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