CGT disposal date

With radical CGT changes about to come into force, it is likely that over the next couple of years the establishment of CGT disposal dates will become of crucial importance. In some cases it will be crucially important to establish a disposal before 6 April 2008, so that the benefit of indexation allowance, and the business-asset tapering relief can be claimed. In other cases, the balance of advantage will lie with a disposal date on or after 6 April 2008, because the 18% flat rate of tax will be more favourable than the combination of a 40% income tax rate and even the most favourable rate of non-business taper relief. Generally, professional advisers are well aware that the critical date is the signing, or exchange, of contracts rather than formal completion by reason of the terms of s28 TCGA 1992. For those seeking to rush through disposals before 6 April, it helpfully enables the disponor to obtain a tax advantage without imposing a cash flow crisis on the other party. However, the Court has provided a timely reminder that the contract does not, of itself, effect the disposal of the asset so as to crystallise a gain or a loss Underwood v HMRC (2008) EWHC 108 Ch.