base cost

base cost
For the purposes of calculating the capital gain realised on the disposal of an asset, for capital gains tax purposes, the base cost i.e. the original cost of the asset, is deducted from the price received. The base cost is subject to adjustment for the purpose of this calculation in a number of ways, for example by deducting expenses or by adding inflation indexation. For assets acquired before 31 March 1982 the market value at that date is substituted for the actual cost. This system is to be replaced for disposals after 5 April 1998 by a form of taper relief that reduces the gain according to the length of time the asset has been held after that date.

Easyform Glossary of Law Terms. — UK law terms.


base cost
The price or cost of an asset (plus improvements to it, minus depreciation, amortisation or similar cost recovery).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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