Calculation of consideration and cost base for CGT purposes can be made complicated by post completion and other events. The impact of different events is examined in this paper including:
- is the cost base fixed by the requirement to pay under the contract or can it change? For example, cost base adjustments for post-completion events
- how is cost base affected by set-off or forgiveness of liability to pay?
- CGT treatment of contingent and unascertainable amounts (eg earn-outs) for both consideration and cost base purposes
- is consideration under a contract ever fixed? What if there is known exposure to a warranty claim when the contract is signed?
- are legal costs related to opposing an indemnity claim part of the seller’s cost base?