LegalizeReform history
Taxation of Chargeable Gains Act 1992
100 versions
· 1992-03-06
2025-03-20
Taxation of Chargeable Gains Act 1992
2025-03-19
Taxation of Chargeable Gains Act 1992
2024-10-30
Taxation of Chargeable Gains Act 1992
2024-05-24
Taxation of Chargeable Gains Act 1992
2024-04-06
Taxation of Chargeable Gains Act 1992
2024-02-22
Taxation of Chargeable Gains Act 1992
2024-01-04
Taxation of Chargeable Gains Act 1992
2023-07-11
Taxation of Chargeable Gains Act 1992
2023-04-06
Taxation of Chargeable Gains Act 1992
2022-05-24
Taxation of Chargeable Gains Act 1992
2022-04-06
Taxation of Chargeable Gains Act 1992
2022-04-05
Taxation of Chargeable Gains Act 1992
2022-02-24
Taxation of Chargeable Gains Act 1992
2021-12-09
Taxation of Chargeable Gains Act 1992
2021-07-08
Taxation of Chargeable Gains Act 1992
2021-06-10
Taxation of Chargeable Gains Act 1992
2021-04-06
Taxation of Chargeable Gains Act 1992
2021-03-24
Taxation of Chargeable Gains Act 1992
2020-12-31
Taxation of Chargeable Gains Act 1992
2020-07-22
Taxation of Chargeable Gains Act 1992
2020-06-26
Taxation of Chargeable Gains Act 1992
2020-05-20
Taxation of Chargeable Gains Act 1992
2020-04-10
Taxation of Chargeable Gains Act 1992
2020-04-06
Taxation of Chargeable Gains Act 1992
2020-04-01
Taxation of Chargeable Gains Act 1992
2020-03-11
Taxation of Chargeable Gains Act 1992
2019-12-02
Taxation of Chargeable Gains Act 1992
2019-11-04
Taxation of Chargeable Gains Act 1992
2019-07-11
Taxation of Chargeable Gains Act 1992
2019-07-05
Taxation of Chargeable Gains Act 1992
2019-04-29
Taxation of Chargeable Gains Act 1992
2019-02-12
Taxation of Chargeable Gains Act 1992
2018-10-29
Taxation of Chargeable Gains Act 1992
2018-10-01
Taxation of Chargeable Gains Act 1992
2018-03-15
Taxation of Chargeable Gains Act 1992
2018-02-09
Taxation of Chargeable Gains Act 1992
2018-01-01
Taxation of Chargeable Gains Act 1992
2017-12-15
Taxation of Chargeable Gains Act 1992
2017-11-16
Taxation of Chargeable Gains Act 1992
2017-04-27
Taxation of Chargeable Gains Act 1992
2017-04-06
Taxation of Chargeable Gains Act 1992
2016-11-30
Taxation of Chargeable Gains Act 1992
2016-10-01
Taxation of Chargeable Gains Act 1992
2016-09-15
Taxation of Chargeable Gains Act 1992
2016-04-06
Taxation of Chargeable Gains Act 1992
2015-11-18
Taxation of Chargeable Gains Act 1992
2015-08-07
Taxation of Chargeable Gains Act 1992
2015-05-26
Taxation of Chargeable Gains Act 1992
2015-04-06
Taxation of Chargeable Gains Act 1992
2015-04-01
Taxation of Chargeable Gains Act 1992
2015-03-26
Taxation of Chargeable Gains Act 1992
2015-03-18
Taxation of Chargeable Gains Act 1992
2015-02-13
Taxation of Chargeable Gains Act 1992
2014-08-01
Taxation of Chargeable Gains Act 1992
2014-07-17
Taxation of Chargeable Gains Act 1992
2014-04-22
Taxation of Chargeable Gains Act 1992
2014-04-06
Taxation of Chargeable Gains Act 1992
2014-01-01
Taxation of Chargeable Gains Act 1992
2013-09-30
Taxation of Chargeable Gains Act 1992
2013-07-17
Taxation of Chargeable Gains Act 1992
2013-06-08
Taxation of Chargeable Gains Act 1992
2013-04-01
Taxation of Chargeable Gains Act 1992
2013-03-01
Taxation of Chargeable Gains Act 1992
2012-12-31
Taxation of Chargeable Gains Act 1992
2012-09-01
Taxation of Chargeable Gains Act 1992
2012-08-01
Taxation of Chargeable Gains Act 1992
2012-07-17
Taxation of Chargeable Gains Act 1992
2012-04-06
Taxation of Chargeable Gains Act 1992
2012-04-01
Taxation of Chargeable Gains Act 1992
2012-03-01
Taxation of Chargeable Gains Act 1992
2011-11-15
Taxation of Chargeable Gains Act 1992
2011-10-01
Taxation of Chargeable Gains Act 1992
2011-07-19
Taxation of Chargeable Gains Act 1992
2011-07-01
Taxation of Chargeable Gains Act 1992
2011-05-27
Taxation of Chargeable Gains Act 1992
2011-04-01
Taxation of Chargeable Gains Act 1992
2011-02-08
Taxation of Chargeable Gains Act 1992
2011-02-01
Taxation of Chargeable Gains Act 1992
2010-12-16
Taxation of Chargeable Gains Act 1992
2010-07-27
Taxation of Chargeable Gains Act 1992
2010-04-08
Taxation of Chargeable Gains Act 1992
2010-04-01
Taxation of Chargeable Gains Act 1992
2010-03-18
Taxation of Chargeable Gains Act 1992
Changes on 2010-03-18
@@ -8414,10 +8414,12 @@
##### 287
- (1) Subject to subsection (2) below, any power of the Treasury or the Board to make any order or regulations under this Act or any other enactment relating to the taxation of chargeable gains passed after this Act shall be exercisable by statutory instrument.
- (1) Subject to subsections (2) and (2A) below, any power of the Treasury or the Board to make any order or regulations under this Act or any other enactment relating to the taxation of chargeable gains passed after this Act shall be exercisable by statutory instrument.
- (2) Subsection (1) above shall not apply in relation to any power conferred by section 288(6).
- (2A) Subsection (1) above shall not apply in relation to any power conferred by TIOPA 2010 (see instead section 372 of that Act).
- (3) Subject to subsection (4) below and to any other provision to the contrary, any statutory instrument to which subsection (1) above applies shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (4) Subsection (3) above shall not apply in relation to an order or regulations made under section 3(4) or 265 or paragraph 1 of Schedule 9, or—
@@ -8501,6 +8503,8 @@
- “stepchild”, in relation to a civil partner, shall be construed in accordance with section 246 of the Civil Partnership Act 2004;
- “*the Taxes Act*” means the Income and Corporation Taxes Act 1988;
- “*TIOPA 2010*” means the Taxation (International and Other Provisions) Act 2010;
- “*trade*” has the same meaning as in the Income Tax Acts;
@@ -11181,15 +11185,15 @@
## SCHEDULE 12
#### Persons and gains chargeable to capital gains tax, and allowable losses.
#### The charge to tax.
#### Individual who has made election under section 16ZA and to whom remittance basis applies
#### Restrictions on allowable losses
#### Section 16ZC: supplementary
#### Assets derived from other assets.
#### Restriction of losses: long funding leases of plant or machinery
#### Restriction of losses by reference to capital allowances and renewals allowances.
#### Exemption for authorised unit trusts etc.
@@ -11475,7 +11479,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of company’s assets to investment trust.
#### Exemption for authorised unit trusts etc.
##### 177A
@@ -11483,7 +11487,7 @@
#### Meaning of “qualifying corporate bond".
#### Holdings in unit trusts and offshore funds excluded from treatment as qualifying corporate bonds.
#### Assets that are not qualifying corporate bonds for corporation tax purposes.
#### Tax recoverable from another group company or controlling director.
@@ -14575,6 +14579,8 @@
[^key-15a1731979dff6f44bd373e06381b6a6]: Words in s. 210A(13) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 7 para. 9(3)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/7/paragraph/9/3/a)
[^key-adb2b1c19ff0a47f1655fe768c24f89f]: Ss. 169B-169G inserted (with effect in accordance with Sch. 21 para. 10(4) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 21 para. 4](https://www.legislation.gov.uk/ukpga/2004/12/schedule/21/paragraph/4)
[^key-ce299ef6ae06f7d2fb9be6436143d012]: Words in s. 211ZA(10) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 7 para. 9(3)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/7/paragraph/9/3/b)
[^key-15ea2b0bb480d22748d67ec306af532b]: Words in s. 213(1A)(a) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 7 para. 9(3)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/7/paragraph/9/3/c)
@@ -16841,8 +16847,6 @@
[^key-f3aa77bc6dac57b0186ac65332f84fbe]: S. 62 applied by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 85W(2) (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by [S.I. 2010/294](https://www.legislation.gov.uk/uksi/2010/294), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2010/294/regulation/1/1), [21](https://www.legislation.gov.uk/uksi/2010/294/regulation/21))
[^key-00e06f24c3e33d43734061dfd157b462]: [S. 62(1)(b)](https://www.legislation.gov.uk/ukpga/1992/12/section/62/1/b) excluded by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 85W(1) (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by S.I. 2010/294, [regs. 1(1)](https://www.legislation.gov.uk/uksi/2010/294/regulation/1/1), [21](https://www.legislation.gov.uk/uksi/2010/294/regulation/21))
[^key-a42e03bd15fd22a92c2b8c8cea03936c]: S. 128 applied by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 85Z8 (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by [S.I. 2010/294](https://www.legislation.gov.uk/uksi/2010/294), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2010/294/regulation/1/1), [21](https://www.legislation.gov.uk/uksi/2010/294/regulation/21))
[^key-ce6ac0460dd43e08b71c26d09618ac72]: S. 135 restricted by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 85X (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by [S.I. 2010/294](https://www.legislation.gov.uk/uksi/2010/294), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2010/294/regulation/1/1), [21](https://www.legislation.gov.uk/uksi/2010/294/regulation/21))
@@ -16857,6 +16861,12 @@
[^key-d34eadb56950761146661d2c82ac3e04]: S. 260 modified by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 85Z3 (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by [S.I. 2010/294](https://www.legislation.gov.uk/uksi/2010/294), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2010/294/regulation/1/1), [21](https://www.legislation.gov.uk/uksi/2010/294/regulation/21))
[^key-9cced852d460cf4f443ba8ec6287c36c]: Words in s. 287(1) substituted (18.3.2010) by [Taxation (International and Other Provisions) Act 2010 (c. 8)](https://www.legislation.gov.uk/ukpga/2010/8), [s. 381(2)(c)](https://www.legislation.gov.uk/ukpga/2010/8/section/381/2/c), [Sch. 8 para. 318(2)](https://www.legislation.gov.uk/ukpga/2010/8/schedule/8/paragraph/318/2) (with [Sch. 9 paras. 1-9](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9/paragraph/1), [22](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9/paragraph/22))
[^key-4edca7e4a1bfa8ccaa47ddc0d41cec8e]: S. 287(2A) inserted (18.3.2010) by [Taxation (International and Other Provisions) Act 2010 (c. 8)](https://www.legislation.gov.uk/ukpga/2010/8), [s. 381(2)(c)](https://www.legislation.gov.uk/ukpga/2010/8/section/381/2/c), [Sch. 8 para. 318(3)](https://www.legislation.gov.uk/ukpga/2010/8/schedule/8/paragraph/318/3) (with [Sch. 9 paras. 1-9](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9/paragraph/1), [22](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9/paragraph/22))
[^key-facc05574d35cfdd734b1c6f0e9981b0]: Words in s. 288(1) inserted (18.3.2010) by [Taxation (International and Other Provisions) Act 2010 (c. 8)](https://www.legislation.gov.uk/ukpga/2010/8), [s. 381(2)(c)](https://www.legislation.gov.uk/ukpga/2010/8/section/381/2/c), [Sch. 8 para. 319](https://www.legislation.gov.uk/ukpga/2010/8/schedule/8/paragraph/319) (with [Sch. 9 paras. 1-9](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9/paragraph/1), [22](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9/paragraph/22))
[^key-355d30062a157147af37e591744701d4]: Words in s. 271(7) repealed: (with effect in accordance with s. 46(5)(b) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 46(3)(d)](https://www.legislation.gov.uk/ukpga/2005/22/section/46/3/d), [Sch. 11 Pt. 2(12)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/11/part/2/12) (with [s. 46(7)](https://www.legislation.gov.uk/ukpga/2005/22/section/46/7)); (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)
[^key-ba1675552646617c034cfbf2f9198bc6]: Words in s. 271(7) substituted (with effect in accordance with s. 46(5)(a) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 46(3)(a)](https://www.legislation.gov.uk/ukpga/2005/22/section/46/3/a) (with [s. 46(7)](https://www.legislation.gov.uk/ukpga/2005/22/section/46/7))
@@ -16871,25 +16881,25 @@
#### Calculation of the disposal cost of accumulation units
#### Shares beginning or ceasing to be shares to which section 521B of CTA 2009 applies
#### Holding beginning or ceasing to fall within section 490 of CTA 2009
#### Assets that are not qualifying corporate bonds for corporation tax purposes.
#### Section 119A: unremitted foreign securities income
#### Increase in expenditure by reference to tax charged in relation to employment-related securities
#### Restrictions on setting losses against pre-entry gains.
#### Roll-over relief on re-investment by trustees.
#### Use of earn-out rights for exchange of securities.
#### Procedure for clearance in advance.
#### Roll-over relief on re-investment by trustees.
#### Relief on re-investment for individuals.
#### Treatment of alternative finance arrangements
#### Other retirement relief.
#### Exchange gains and losses from loan relationships: regulations
#### Relief for disposals by individuals on retirement from family business.
##### 98A
@@ -17051,11 +17061,11 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of sections 127 to 131.
#### Effect of share loss relief
#### Relief on re-investment for individuals.
#### Transfer or division of UK business
#### Postponement of charge on transfer of assets to non-resident company.
## SCHEDULE 5A
@@ -20753,7 +20763,7 @@
and in subsection (4) the reference to section 128(3) includes a reference to that provision as it is applied by virtue of any enactment relating to chargeable gains.
#### Assets derived from other assets.
#### Part disposals.
#### Variation of will or intestacy, etc: identification of settlor
@@ -23214,7 +23224,7 @@
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax exempt distributions.
#### Tax recoverable from another group company or controlling director.
##### 279D
@@ -23770,7 +23780,7 @@
- (12) In this section “*UK shares*” has the meaning given by section 566(2) of ITA 2007.
#### Roll-over relief on re-investment by trustees.
#### Relief on re-investment for individuals.
#### Chargeable event when replacement property owned.
@@ -23892,7 +23902,7 @@
- (3) This section has effect as if it were contained in Chapter 14 of Part 2 of ITTOIA 2005.
#### Material disposal of business assets
#### Introduction
#### Information.
@@ -24248,7 +24258,7 @@
- (6) This section applies to losses accruing on or after 6th April 2005.
#### Restrictions on setting losses against pre-entry gains.
#### Restriction on set-off of pre-entry losses.
##### 275A
@@ -24362,3040 +24372,3040 @@
#### Company that receives mixed consideration: N exceeds C
#### Leases of land and other assets.
#### De-registration of registered pension schemes
#### Disposal of know-how as part of disposal of all or part of a trade
##### 68A
- (1) In this Act, unless the context otherwise requires—
- (a) “*settlor*” in relation to a settlement means the person, or any of the persons, who has made, or is treated for the purposes of this Act as having made, the settlement, and
- (b) a person is a settlor of property which—
- (i) is settled property by reason of his having made the settlement (or by reason of an event which causes him to be treated under this Act as having made the settlement), or
- (ii) derives from property to which sub-paragraph (i) applies.
- (2) A person is treated for the purposes of this Act as having made a settlement if—
- (a) he has made or entered into the settlement, directly or indirectly, or
- (b) the settled property, or property from which the settled property is derived, is or includes property of which he was competent to dispose immediately before his death, and the settlement arose on his death, whether by will, on his intestacy, or otherwise.
- (3) A person is, in particular, treated for the purposes of this Act as having made a settlement if—
- (a) he has provided property directly or indirectly for the purposes of the settlement, or
- (b) he has undertaken to provide property directly or indirectly for the purposes of the settlement.
- (4) Where one person (A) makes or enters into a settlement in accordance with reciprocal arrangements with another person (B), for the purposes of this Act—
- (a) B shall be treated as having made the settlement, and
- (b) A shall not be treated as having made the settlement by reason only of the reciprocal arrangements.
- (5) In subsection (2)(b) “*property of which he was competent to dispose immediately before his death*” shall be construed in accordance with section 62(10) (reading each reference to “assets” as a reference to “property”).
- (6) A person who has been a settlor in relation to a settlement shall be treated for the purposes of this Act as having ceased to be a settlor in relation to the settlement if—
- (a) no property of which he is a settlor is comprised in the settlement,
- (b) he has not undertaken to provide property directly or indirectly for the purposes of the settlement in the future, and
- (c) he has not made reciprocal arrangements with another person for that other person to enter into the settlement in the future.
- (7) For the purpose of this section and sections 68B and 68C property is derived from other property—
- (a) if it derives (directly or indirectly and wholly or partly) from that property or any part of it, and
- (b) in particular, if it derives (directly or indirectly and wholly or partly) from income from that property or any part of it.
- (8) In this section “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable.
##### 68B
- (1) This section applies in relation to a transfer of property from the trustees of one settlement (“Settlement 1”) to the trustees of another (“Settlement 2”) otherwise than—
- (a) for full consideration, or
- (b) by way of a bargain made at arm's length.
- (2) In this section “*transfer of property*” means—
- (a) a disposal of property by the trustees of Settlement 1, and
- (b) the acquisition by the trustees of Settlement 2 of—
- (i) property disposed of by the trustees of Settlement 1, or
- (ii) property created by the disposal;
and a reference to transferred property is a reference to property acquired by the trustees of Settlement 2 on the disposal.
- (3) For the purposes of this Act, except where the context otherwise requires—
- (a) the settlor (or each settlor) of the property disposed of by the trustees of Settlement 1 shall be treated from the time of the disposal as having made Settlement 2, and
- (b) if there is more than one settlor of the property disposed of by the trustees of Settlement 1, each settlor shall be treated in relation to Settlement 2 as the settlor of a proportionate part of the transferred property.
- (4) For the purposes of this Act, except where the context otherwise requires, if and to the extent that the property disposed of by the trustees of Settlement 1 was provided for the purposes of Settlement 1, or is derived from property provided for the purposes of Settlement 1, the transferred property shall be treated from the time of the disposal as having been provided for the purposes of Settlement 2.
- (5) If transferred property is treated by virtue of subsection (4) as having been provided for the purposes of Settlement 2 —
- (a) the person who provided the property disposed of by the trustees of Settlement 1, or property from which it was derived, for the purposes of Settlement 1 shall be treated as having provided the transferred property, and
- (b) if more than one person provided the property disposed of by the trustees of Settlement 1, or property from which it was derived, for the purposes of Settlement 1, each of them shall be treated as having provided a proportionate part of the transferred property.
- (6) But subsections (3) and (4) do not apply in relation to a transfer of property—
- (a) which occurs by reason only of the assignment or assignation by a beneficiary under Settlement 1 of an interest in that settlement to the trustees of Settlement 2,
- (b) which occurs by reason only of the exercise of a general power of appointment, or
- (c) to which section 68C(6) applies.
- (7) In determining whether this section applies in relation to a transfer of property between settlements, section 18(2) shall be disregarded.
#### Restrictions on buying losses: tax avoidance schemes
#### Sections 184A and 184B: meaning of “qualifying change of ownership”
#### Interpretation of sections 194 to 195E .
#### Deferred unascertainable consideration: election for treatment of loss
#### Effect of election under section 279A
##### 25A
- (1) This section applies where plant or machinery is used for the purpose of leasing under a long funding lease.
- (2) The lessor shall be deemed for all purposes of this Act—
- (a) to have disposed of the plant or machinery at the commencement of the term of the lease at the relevant disposal value, and
- (b) to have immediately reacquired it at the same value.
- (3) The lessor shall also be deemed for all purposes of this Act—
- (a) to have disposed of the plant or machinery on the termination of the lease for a consideration equal to the termination amount, and
- (b) to have immediately reacquired it for the same consideration.
- (4) “*Relevant disposal value*” means—
- (a) in relation to a long funding finance lease, the disposal value described in item 5A of the table in section 61(2) of the Capital Allowances Act (disposal values), and
- (b) in relation to a long funding operating lease, the disposal value described in item 5B of that table.
- (5) For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—
- “*commencement*”, in relation to the term of a lease,
- “lessor”,
- “long funding lease”,
- “long funding finance lease”,
- “long funding operating lease”,
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*the term*”, in relation to a lease,
- “termination”,
- “termination amount”.
##### 41A
- (1) This section applies where a person disposes of an asset—
- (a) which includes plant or machinery which is a fixture for the purposes of Chapter 6A of Part 2 of the Capital Allowances Act, and
- (b) which he has used for the purpose of leasing under one or more long funding leases.
- (2) In the computation of the amount of a loss accruing to the person on the disposal there shall be excluded from the sums allowable as a deduction by virtue of section 38(1)(a) and (b) (acquisition and enhancement costs) an amount determined in accordance with subsection (3) or (4).
- (3) Where the person has used the plant or machinery for the purpose of leasing under one long funding lease, the amount is equal to the fall in value of the plant or machinery during the period of the lease.
- (4) Where the person has used the plant or machinery for the purpose of leasing under more than one long funding lease, the amount is equal to the sum of the fall in value of the plant or machinery during the period of each lease.
- (5) In this section, references to the fall in value of plant or machinery during the period of a lease are references to the amount (if any) by which—
- (a) the market value of the plant or machinery at the commencement of the term of the lease,
exceeds
- (b) its market value at the termination of the lease.
- (6) For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—
- “*commencement*”, in relation to the term of a lease,
- “long funding lease”,
- “market value”,
- “*the term*”, in relation to a lease,
- “termination”.
##### 63A
- (1) The provisions of this Act, so far as relating to the consequences of the death of a person to whom property in Northern Ireland stands limited for life (“*the deceased*”), shall have effect subject to the provisions of this section.
- (2) A person who acquires property in fee simple absolute or fee tail in possession as a consequence of the deceased's death shall be deemed to have acquired all the assets forming part of the property at the date of the deceased's death for a consideration equal to their market value at that date.
##### 68C
- (1) This section applies where—
- (a) a disposition of property following a person's death is varied, and
- (b) section 62(6) applies in respect of the variation.
- (2) Where property becomes settled property in consequence of the variation (and would not, but for the variation, have become settled property), a person mentioned in subsection (3) shall be treated for the purposes of this Act, except where the context otherwise requires—
- (a) as having made the settlement, and
- (b) as having provided the property for the purposes of the settlement.
- (3) Those persons are—
- (a) a person who immediately before the variation was entitled to the property, or to property from which it derives, absolutely as legatee,
- (b) a person who would have become entitled to the property, or to property from which it derives, absolutely as legatee but for the variation,
- (c) a person who immediately before the variation would have been entitled to the property, or to property from which it derives, absolutely as legatee but for being an infant or other person under a disability, and
- (d) a person who would, but for the variation, have become entitled to the property, or to property from which it derives, absolutely as legatee if he had not been an infant or other person under a disability.
- (4) In subsection (3) references to a person being entitled to property absolutely as legatee shall be construed in accordance with section 64(3) (reading the references to “an asset” and “any asset” as references to “property”).
- (5) Where—
- (a) property would have become comprised in a settlement—
- (i) which arose on the deceased person's death (whether in accordance with his will, on his intestacy or otherwise), or
- (ii) which was already in existence on the deceased person's death (whether or not the deceased person was a settlor in relation to that settlement), but
- (b) in consequence of the variation the property, or property derived from it, becomes comprised in another settlement,
the deceased person shall be treated for the purposes of this Act, except where the context otherwise requires, as having made the other settlement.
- (6) Where—
- (a) immediately before the variation property is comprised in a settlement and is property of which the deceased person is a settlor, and
- (b) immediately after the variation the property, or property derived from it, becomes comprised in another settlement,
the deceased person shall be treated for the purposes of this Act, except where the context otherwise requires, as having made the other settlement.
- (7) If a person is treated as having made a settlement under subsection (5) or (6), for the purposes of this Act he shall be treated as having made the settlement immediately before his death.
- (8) But subsection (7) does not apply in relation to a settlement which arose on the person's death.
##### 69A
Schedule 4ZA (which makes provision about sub-fund settlements) shall have effect.
### Restrictions on buying losses or gains etc
##### 184A
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if—
- (a) at any time (“*the relevant time*”) there is a qualifying change of ownership in relation to a company (“*the relevant company*”) (see section 184C),
- (b) a loss (a “qualifying loss”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)),
- (c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage (see section 184D), and
- (d) the advantage involves the deduction of a qualifying loss from any chargeable gains (whether or not it also involves anything else).
- (2) A qualifying loss accruing to a company is not to be deductible from chargeable gains accruing to the company ... .
- (3) In this section a “*pre-change asset*” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F).
- (4) In this section “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
- (5) For the purposes of this section it does not matter—
- (a) whether a qualifying loss accrues before, after or at the relevant time,
- (b) whether a qualifying loss accrues at a time when there are no chargeable gains from which it could be deducted (or could otherwise have been deducted), or
- (c) whether the tax advantage is secured for the company to which a qualifying loss accrues or for any other company.
##### 184B
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if—
- (a) at any time (“*the relevant time*”) there is a qualifying change of ownership in relation to a company (“*the relevant company*”) (see section 184C),
- (b) a gain (a “qualifying gain”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)),
- (c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, and
- (d) the advantage involves the deduction of a loss from a qualifying gain (whether or not it also involves anything else).
- (2) In the case of a qualifying gain accruing to a company, a loss accruing to the company is not to be deductible from the gain ... .
- (3) In this section a “*pre-change asset*” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F).
- (4) In this section “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
- (5) For the purposes of this section it does not matter—
- (a) whether a qualifying gain accrues before, after or at the relevant time,
- (b) whether a qualifying gain accrues at a time when there are no losses which could be deducted (or could otherwise have been deducted) from the gain, or
- (c) whether the tax advantage is secured for the company to which a qualifying gain accrues or for any other company.
##### 184C
- (1) For the purposes of sections 184A and 184B, there is a qualifying change of ownership in relation to a company at any time if any one or more of the following occur at that time—
- (a) the company joins a group of companies (see subsections (2) to (5)),
- (b) the company ceases to be a member of a group of companies,
- (c) the company becomes subject to different control (see subsections (6) to (9)).
- (2) Whether a company is a member of a group of companies at any time is determined in accordance with section 170.
- (3) But, apart from in the excepted case, nothing in section 170(10) or (10A) is to prevent all the companies of one group from being regarded as joining another group when the principal company of the first group becomes a member of the other group at any time.
- (4) The excepted case is the case where—
- (a) the persons owning the shares of the principal company of the first group immediately before that time are the same as the persons owning the shares of the principal company of the other group immediately after that time,
- (b) the principal company of the other group was not the principal company of any group immediately before that time, and
- (c) immediately after that time the principal company of the other group had assets consisting entirely (or almost entirely) of shares of the principal company of the first group.
- (5) For this purpose, references to shares of a company are to the shares comprised in the issued share capital of the company.
- (6) The general rule is that a company becomes subject to different control at any time if any one or more of the following occur—
- (a) a person has control of the company at that time (whether alone or together with one or more others) and the person did not previously have control of the company,
- (b) a person has control of the company at that time together with one or more others and the person previously had control of the company alone,
- (c) a person ceases to have control of the company at that time (whether the person had control alone or together with one or more others).
- (7) The general rule is subject to the following exceptions.
- (8) A company does not become subject to different control in any case where it joins a group of companies and the case is the excepted case mentioned above.
- (9) A company (“the subsidiary”) does not become subject to different control at any time in any case where—
- (a) immediately before that time the subsidiary is the 75 per cent. subsidiary of another company, and
- (b) (although there is a change in the direct ownership of the subsidiary) that other company continues immediately after that time to own it as a 75 per cent. subsidiary.
##### 184D
For the purposes of sections 184A and 184B, “*tax advantage*” means—
- (a) relief or increased relief from corporation tax,
- (b) repayment or increased repayment of corporation tax,
- (c) the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax, or
- (d) the avoidance of a possible assessment to corporation tax.
##### 184E
- (1) If—
- (a) a company other than the relevant company makes a disposal of an asset, and
- (b) the asset has been disposed of at any time after the relevant time by a disposal to which section 171(1) does not apply (a “non-section 171(1) transfer”),
the asset ceases to be regarded as a pre-change asset for the purposes of sections 184A and 184B (but see also subsections (10) and (11)).
- (2) But (without affecting the generality of the provision made by the following subsection) if, on a non-section 171(1) transfer,—
- (a) an asset would cease to be regarded as a pre-change asset as a result of subsection (1), and
- (b) the company making the non-section 171(1) transfer retains any interest in or over the asset,
that interest is to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (3) If—
- (a) the relevant company or any other company holds an asset (“the new asset”) at or after the relevant time,
- (b) the value of the new asset derives in whole or in part from a pre-change asset, and
- (c) the new asset is not acquired by the company concerned as a result of a non-section 171(1) transfer,
the new asset is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (4) For this purpose the cases in which the value of an asset may be derived from any other asset include any case where—
- (a) assets have been merged or divided,
- (b) assets have changed their nature, or
- (c) rights or interests in or over assets have been created or extinguished.
- (5) If a pre-change asset is “*the old asset*” for the purposes of section 116 (reorganisations, conversions and reconstructions), “*the new asset*” for the purposes of that section is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (6) If a pre-change asset is the “*original shares*” for the purposes of sections 127 to 131 (reorganisation or reduction of share capital), the “*new holding*” for the purposes of those sections is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (7) The following subsection applies if, as a result of the application of a relevant deferral provision in the case of a disposal of a pre-change asset (“the original disposal”),—
- (a) a gain or loss that would otherwise accrue to a company does not so accrue, or
- (b) any part of any such gain is treated as forming part of a single chargeable gain which does not accrue to the company on the original disposal,
and a gain or loss does, wholly or partly in consequence of the application of that provision in the case of the original disposal, accrue to the company or any other company on a subsequent occasion.
- (8) So much of the gain or loss accruing on the subsequent occasion as accrues in consequence of the application of the relevant deferral provision in the case of the original disposal is to be regarded for the purposes of sections 184A and 184B as accruing on a disposal of a pre-change asset (so far as it would not otherwise be so regarded).
- (9) A “*relevant deferral provision*” means any of the following—
- (a) section 139 (reconstruction involving transfer of business),
- (b) section 140 (postponement of charge on transfer of assets to non-resident company),
- (c) section 140A (transfer of a UK trade),
- (d) section 140E (merger leaving assets within UK tax charge),
- (e) sections 152 and 153 (replacement of business assets),
- (f) section 187 (postponement of charge on deemed disposal under section 185).
- (10) If—
- (a) a pre-change asset of the relevant company is transferred to another company (“*the transferee company*”),
- (b) any of sections 139, 140A and 140E apply to the companies in the case of the asset, and
- (c) the transfer of the asset is made directly or indirectly in consequence of, or otherwise in connection with, the arrangements mentioned in section 184A or 184B,
the asset is to be regarded as a “pre-change asset” in the hands of the transferee company for the purposes of sections 184A and 184B.
- (11) In such a case, subsection (1) applies as if the reference in paragraph (a) of that subsection to the relevant company were to the transferee company.
##### 184F
- (1) This section applies, in the case of any pre-change asset of the relevant company or any pre-change asset of any company which is acquired on a disposal to which section 171(1) applies, if—
- (a) the pre-change asset consists of a holding of securities which falls as a result of any provision of Chapter 1 of Part 4 to be regarded as a single asset (“the pre-change pooled asset”), and
- (b) as a result of any disposal or acquisition at any time after the relevant time, any securities (“the other securities”) would (but for this section) be regarded as forming part of the pre-change pooled asset.
- (2) None of the other securities are to be regarded for the purposes of this Act as forming part of the pre-change pooled asset.
- (3) But this does not prevent the other securities from being regarded, as a result of any provision of that Chapter, as forming part of or constituting a different, single asset (“the other pooled asset”).
- (4) Securities of the same class as the other securities which are disposed of at or after the relevant time—
- (a) are to be identified first with the other securities or securities forming part of the other pooled asset,
- (b) are to be identified next with securities forming part of the pre-change pooled asset (if the number of securities disposed of exceeds the number identified in accordance with paragraph (a)), and
- (c) subject to paragraphs (a) and (b), are to be identified in accordance with the provisions applicable apart from those paragraphs.
- (5) The above identification rules apply even if some or all of the securities disposed of are otherwise identified—
- (a) by the disposal, or
- (b) by a transfer or delivery giving effect to it;
but where a company disposes of securities in one capacity, they are not to be identified with securities which it holds, or can dispose of, only in some other capacity.
- (6) Chapter 1 of Part 4 has effect subject to this section.
- (7) In this section—
- “*pre-change asset*” means an asset which is pre-change asset for the purposes of section 184A or 184B,
- “*securities*” does not include relevant securities as defined in section 108 but, subject to that, means—shares or securities of a company, andany other assets where they are of a nature to be dealt in without identifying the particular assets disposed of or acquired.
- (8) For the purposes of this section, shares or securities of a company are not to be treated as being of the same class unless—
- (a) they are so treated by the practice of a recognised stock exchange, or
- (b) they would be so treated if dealt with on a recognised stock exchange.
##### 184G
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied.
- (2) Condition A is that—
- (a) any receipt arises to a company (“*the relevant company*”) on a disposal of an asset, and
- (b) the receipt arises directly or indirectly in consequence of, or otherwise in connection with, any arrangements.
- (3) Condition B is that—
- (a) a chargeable gain (the “relevant gain”) accrues to the relevant company on the disposal, and
- (b) losses accrue (or have accrued) to the relevant company on any other disposal of any asset (whether before or after or as part of the arrangements).
- (4) Condition C is that, but for the arrangements, an amount would have fallen to be taken into account wholly or partly instead of the receipt in calculating the income chargeable to corporation tax—
- (a) of the relevant company, or
- (b) of a company which, at any qualifying time, is a member of the same group as the relevant company.
- (5) Condition D is that—
- (a) the main purpose of the arrangements, or
- (b) one of the main purposes of the arrangements,
is to secure a tax advantage that involves the deduction of any of the losses from the relevant gain (whether or not it also involves anything else).
- (6) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the relevant company a notice in respect of the arrangements (but see also section 184I).
- (7) If, when the notice is given, conditions A to D are satisfied, no loss accruing to the relevant company at any time is to be deductible from the relevant gain.
- (8) A notice under this section must—
- (a) specify the arrangements,
- (b) specify the accounting period in which the relevant gain accrues, and
- (c) inform the relevant company of the effect of this section.
- (9) If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned.
- (10) In this section—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
- “*group*”, in relation to companies, means a group determined in accordance with section 170,
- “*qualifying time*”, in relation to any arrangements, means any time which falls in the period—beginning with the time at which the arrangements are made, andending with the time at which the matters (other than any tax advantage) intended to be secured by the arrangements are secured,
- “*tax advantage*” has the meaning given by section 184D.
##### 184H
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied.
- (2) Condition A is that—
- (a) a chargeable gain (the “relevant gain”) accrues to a company (“*the relevant company*”) directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
- (b) losses accrue (or have accrued) to the relevant company on any disposal of any asset (whether before or after or as part of the arrangements).
- (3) Condition B is that the relevant company, or a company connected with the relevant company, incurs any expenditure—
- (a) which is allowable as a deduction in calculating its total profits chargeable to corporation tax but which is not allowable as a deduction in computing its gains under section 38, and
- (b) which is incurred directly or indirectly in consequence of, or otherwise in connection with, the arrangements.
- (4) Condition C is that the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage that involves both—
- (a) the deduction of the expenditure in calculating total profits, and
- (b) the deduction of any of the losses from the relevant gain,
whether or not it also involves anything else.
- (5) Condition D is that the arrangements are not excluded arrangements. For this purpose arrangements are excluded arrangements if—
- (a) the arrangements are made in respect of land or any estate or interest in land,
- (b) the arrangements fall within section 779(1) or (2) of the Taxes Act (sale and lease-back: limitation on tax reliefs),
- (c) the person to whom the payment mentioned in that subsection is payable is not a company connected with the relevant company, and
- (d) the arrangements are made between persons dealing at arm's length.
- (6) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the company a notice in respect of the arrangements (but see also section 184I).
- (7) If, when the notice is given, conditions A to D are satisfied, no loss accruing to the company at any time is to be deductible from the relevant gain.
- (8) A notice under this section must—
- (a) specify the arrangements,
- (b) specify the accounting period in which the relevant gain accrues, and
- (c) inform the relevant company of the effect of this section.
- (9) If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned.
- (10) In this section—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
- “*tax advantage*” has the meaning given by section 184D.
- (11) For the purposes of this section it does not matter whether the tax advantage is secured for the relevant company or for any other company.
##### 184I
- (1) Subsection (2) applies if—
- (a) the Board give a notice under section 184G or 184H (a “relevant notice”) to a company that specifies an accounting period, and
- (b) the notice is given before the company has made its company tax return for that accounting period.
- (2) If the company makes its return for that period before the end of the applicable 90 day period (see subsection (12)), it may—
- (a) make a return that disregards the notice, and
- (b) at any time after making the return and before the end of the applicable 90 day period, amend the return for the purpose of complying with the provision referred to in the notice.
- (3) If a company has made a company tax return for an accounting period, the Board may give the company a relevant notice in relation to that period only if a notice of enquiry has been given to the company in respect of its return for that period.
- (4) After any enquiries into the return for that period have been completed, the Board may give the company a relevant notice only if requirements A and B are met.
- (5) Requirement A is that at the time the enquiries into the return were completed, the Board could not have been reasonably expected, on the basis of information made available—
- (a) to them before that time, or
- (b) to an officer of theirs before that time,
to have been aware that the circumstances were such that a relevant notice could have been given to the company in relation to that period.
- (6) For the purposes of requirement A, paragraph 44(2) and (3) of Schedule 18 to the Finance Act 1998 (information made available) applies as it applies for the purposes of paragraph 44(1).
- (7) Requirement B is that—
- (a) the company or any other person was requested to produce or provide information during an enquiry into the return for that period, and
- (b) if the request had been duly complied with, the Board could reasonably have been expected to give the company a relevant notice in relation to that period.
- (8) If—
- (a) a company makes a company tax return for an accounting period, and
- (b) the company is subsequently given a relevant notice that specifies that period,
it may amend the return for the purpose of complying with the provision referred to in the notice at any time before the end of the applicable 90 day period.
- (9) If the relevant notice is given to the company after it has been given a notice of enquiry in respect of its return for the period, no closure notice may be given in relation to its company tax return until—
- (a) the end of the applicable 90 day period, or
- (b) the earlier amendment of its company tax return for the purpose of complying with the provision referred to in the notice.
- (10) If the relevant notice is given to the company after any enquiries into the return for the period are completed, no discovery assessment may be made as regards the chargeable gain to which the notice relates until—
- (a) the end of the applicable 90 day period, or
- (b) the earlier amendment of the company tax return for the purpose of complying with the provision referred to in the notice.
- (11) Subsections (2)(b) and (8) do not prevent a company tax return for a period becoming incorrect if—
- (a) a relevant notice is given to the company in relation to that period,
- (b) the return is not amended in accordance with subsection (2)(b) or (8) for the purpose of complying with the provision referred to in the notice, and
- (c) the return ought to have been so amended.
- (12) In this section—
- “*the applicable 90 day period*”, in relation to a relevant notice, means the period of 90 days beginning with the day on which the notice is given,
- “*closure notice*” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998,
- “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of that Schedule, as read with paragraph 4 of that Schedule,
- “*discovery assessment*” means an assessment under paragraph 41 of that Schedule,
- “*notice of enquiry*” means a notice under paragraph 24 of that Schedule.
#### Relief on re-investment for individuals.
#### Company that gives mixed consideration
##### 263E
- (1) This section applies if—
- (a) section 774B of the Taxes Act (disregard of intended effects of arrangement involving disposals of assets) applies in relation to a structured finance arrangement,
- (b) the borrower or a person connected with the borrower makes a disposal of any security at any time under the arrangement to or for the benefit of the lender or a person connected with the lender, and
- (c) condition A or B is met.
- (2) Condition A is that the person making the disposal (and no-one else) has the right or obligation under the arrangement to acquire the asset disposed of by that disposal at any subsequent time (whether or not the right or obligation is subject to any conditions).
- (3) Condition B is that—
- (a) the asset disposed of by that disposal will subsequently cease to exist at any time, and
- (b) it is intended that that asset will be held by the lender, or a person connected with the lender, from the time of the disposal until that time.
- (4) The disposal of the security by the borrower or a person connected with the borrower is to be disregarded for the purposes of this Act.
- (4A) If, at any time after that disposal, it becomes apparent that—
- (a) the person making the disposal will not subsequently acquire under the arrangement the asset disposed of by that disposal, or
- (b) that asset will not be held as mentioned in subsection (3)(b),
that person is to be treated for the purposes of this Act as disposing of that asset at that time for a consideration equal to its market value at that time.
- (5) Except in a case falling within subsection (4A), any subsequent acquisition by the person making the disposal of the asset disposed of by that disposal is to be disregarded for the purposes of this Act.
- (6) In this section—
- “*the borrower*”, in relation to a structured finance arrangement, means the person who is the borrower under the arrangement for the purposes of section 774A of the Taxes Act,
- “*the lender*”, in relation to a structured finance arrangement, means the person who is the lender under the arrangement for the purposes of that section,
- “*security*” means any such asset as is mentioned in subsection (2)(c) and (d) of that section.
- (7) For the purposes of this section—
- (a) references to a person connected with the borrower do not include the lender, and
- (b) references to a person connected with the lender do not include the borrower.
##### 268A
- (1) A gain accruing on a disposal is not a chargeable gain if it accrues on—
- (a) a disposal of the right to receive the whole or any part of a qualifying payment in respect of National-Socialist persecution, or
- (b) a disposal of an interest in any such right.
- (2) A payment is a qualifying payment in respect of National-Socialist persecution if it is payable as mentioned in paragraphs (a) to (c) of section 756A(1) of ITTOIA 2005 (income tax exemption for payments to or in respect of victims of National-Socialist persecution).
- (3) In this section “*interest*”, in relation to any right, means an interest as a co-owner of the right.
- (4) It does not matter—
- (a) whether the right is owned jointly or in common, or
- (b) whether or not the interests of the co-owners are equal.
#### Disposals of interests in oil fields etc: ring fence provisions.
#### Disposals by Housing Corporation, the Secretary of State, Scottish Homes and certain housing associations.
#### Chargeable events when bonds owned.
#### Effect of election under section 279A
#### Consideration payable by instalments.
##### A1
- (1) In determining the exempt amount available to the trustees of a settlement in relation to a year of assessment—
- (a) a principal settlement and its sub-fund settlements shall be treated, for the purposes of paragraphs 1 and 2 below, as if no sub-fund elections had been made, and
- (b) paragraph 3 below shall apply for the purposes of determining the exempt amount available to each member of the class consisting of a principal settlement and its sub-fund settlements.
- (2) The reference in sub-paragraph (1) above to a principal settlement and its sub-fund settlements means a principal settlement in respect of which one or more sub-fund elections are treated as having taken effect.
##### 3
- (1) The exempt amount available in relation to a year of assessment to the trustees of each settlement in the class consisting of a principal settlement and its sub-fund settlements shall be the exempt amount available to the trustees of the principal settlement in relation to the year, determined in accordance with paragraph 1 or 2 above as if no sub-fund elections had been made.
- (2) But if there are two or more non-excluded settlements in the class consisting of a principal settlement and its sub-fund settlements, the exempt amount available to the trustees of each settlement in the class in relation to the year shall be the amount specified in sub-paragraph (1) above divided by the number of non-excluded settlements in the class.
- (3) In this paragraph—
- “*excluded settlement*” has the meaning given by paragraph 2(7) above, and
- references to a settlement having sub-fund settlements, and similar expressions, are references to a settlement being the principal settlement in respect of which one or more sub-fund elections are treated as having taken effect.
## SCHEDULE 4ZA
### Making a sub-fund election
##### 1
The trustees of a settlement (the “principal settlement”) may elect that a fund or other specified portion of the settled property (the “sub-fund”) be treated, unless the context otherwise requires, as a separate settlement (the “sub-fund settlement”) for the purposes of this Act, and the election shall have effect.
##### 2
- (1) An election under paragraph 1 (a “sub-fund election”) must specify the date on which it is to be treated as having taken effect, which must not be later than the date on which it is made.
- (2) The election shall be treated as having taken effect—
- (a) at the beginning of the specified date, or
- (b) if there is a deemed disposal of an asset by the trustees of the principal settlement under section 71(1) (by virtue of paragraph 19) or section 80(2) (by virtue of paragraph 18(2)), on the specified date immediately after the deemed disposal.
##### 3
Trustees may make a sub-fund election only if—
- (a) Conditions 1 to 4 are satisfied when the election is made, and
- (b) Conditions 2 to 4 were satisfied throughout the period beginning with the time when the election is to be treated as having taken effect and ending immediately before the election is made.
##### 4
Condition 1 is that the principal settlement is not itself a sub-fund settlement.
##### 5
Condition 2 is that the sub-fund is not the whole of the property comprised in the principal settlement.
##### 6
Condition 3 is that, if the sub-fund election had taken effect, the sub-fund settlement would not consist of or include an interest in an asset any other interest in which would be comprised in the principal settlement.
##### 7
For the purpose of Condition 3—
- (a) section 104(1) shall not have effect, and
- (b) “*interest*”, in relation to any asset, means an interest as a co-owner of the asset (whether the asset is owned jointly or in common and whether or not the interests of the co-owners are equal).
##### 8
Condition 4 is that, if the sub-fund election had taken effect, no person would be a beneficiary under both the sub-fund settlement and the principal settlement.
##### 9
- (1) For the purpose of Condition 4 a person is a beneficiary under a settlement—
- (a) if—
- (i) any property which is or may at any time be comprised in the settlement, or
- (ii) any derived property,
is, or will or may become, payable to him or applicable for his benefit in any circumstances whatsoever, or
- (b) if he enjoys a benefit deriving directly or indirectly from—
- (i) any property which is comprised in the settlement, or
- (ii) any derived property.
- (2) But for the purpose of Condition 4 a person is not to be regarded as a beneficiary under a settlement if property comprised in the settlement, or any derived property, will or may become payable to him or applicable for his benefit by reason only of—
- (a) his marrying, or entering into a civil partnership with, a beneficiary under the settlement,
- (b) the death of a beneficiary under the settlement,
- (c) the exercise by the trustees of the settlement of—
- (i) a power conferred by section 32 of the Trustee Act 1925 (c. 19) or section 33 of the Trustee Act (Northern Ireland) 1958 (c. 23 (N.I.)) (powers of advancement),
- (ii) a power conferred by the law of a jurisdiction other than England and Wales or Northern Ireland which makes provision similar to the provisions specified in sub-paragraph (i), or
- (iii) a power of advancement which is conferred by the instrument creating the principal settlement, or by another instrument made in accordance with the terms of the principal settlement, and which is subject to the same restrictions as those specified in section 32(1)(a) and (c) of the Trustee Act 1925, or
- (d) the failure or determination of trusts of the kind described in section 33 of the Trustee Act 1925 (protective trusts).
- (3) In this paragraph “*derived property*”, in relation to any property, means—
- (a) income from that property,
- (b) property directly or indirectly representing—
- (i) proceeds of that property, or
- (ii) proceeds of income from that property, or
- (c) income from property which is derived property by virtue of paragraph (b).
### Sub-fund elections: procedure
##### 10
A sub-fund election must be made—
- (a) by notice to an officer of Revenue and Customs, and
- (b) in such form as the Commissioners for Her Majesty's Revenue and Customs may require.
##### 11
A sub-fund election may not be made after the second 31st January after the year of assessment in which the date on which the election is to be treated as having taken effect falls.
##### 12
A sub-fund election must contain—
- (a) a declaration by each trustee of the principal settlement that he consents to the election,
- (b) a statement by the trustees of the principal settlement that the requirement in paragraph 3 is satisfied,
- (c) such information as the Commissioners for Her Majesty's Revenue and Customs may require in relation to the principal settlement (which may, in particular, include information relating to the trustees, the trusts, property which is or has been comprised in the settlement, the settlors or the beneficiaries),
- (d) a declaration by the trustees of the principal settlement that the information given in the election is correct, to the best of their knowledge and belief, and
- (e) such other declarations as the Commissioners for Her Majesty's Revenue and Customs may require.
##### 13
A sub-fund election may not be revoked.
### Power to make enquiries
##### 14
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 15
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 16
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Consequences of a sub-fund election
##### 17
The sub-fund settlement shall be treated, for the purposes of this Act, as having been created at the time when the sub-fund election is treated as having taken effect.
##### 18
- (1) Each trustee of the trusts on which the property comprised in the sub-fund settlement is held shall be treated as a trustee of the sub-fund settlement for the purposes of this Act.
- (2) A person who is a trustee of the sub-fund settlement shall be treated for the purposes of this Act, from the time when the election is treated as having taken effect, as having ceased to be a trustee of the principal settlement unless he is also a trustee of trusts on which property comprised in the principal settlement is held.
- (3) A person who is a trustee of the principal settlement shall not be treated for the purposes of this Act as a trustee of the sub-fund settlement unless he is also a trustee of trusts on which property comprised in the sub-fund settlement is held.
##### 19
The trustees of the sub-fund settlement shall be treated for the purposes of this Act as having become absolutely entitled, at the time when the sub-fund election is treated as having taken effect, to the property comprised in that settlement as against the trustees of the principal settlement.
##### 20
- (1) A deemed disposal by the trustees of the principal settlement of an asset under section 71(1) (by virtue of paragraph 19) or section 80(2) (by virtue of paragraph 18(2)) shall be treated as having been made at the beginning of the date on which the sub-fund election is treated as having taken effect.
- (2) If the trustees of the sub-fund settlement have acquired an asset of which the trustees of the principal settlement are deemed to have disposed under section 71(1) (by virtue of paragraph 19), they shall be deemed to have acquired it at the time when the election is treated as having taken effect.
- (3) The trustees of the principal settlement shall not be treated as having disposed of an asset under section 80(2) by virtue of paragraph 18(2) if they are treated as having disposed of the same asset under section 71(1) by virtue of paragraph 19.
##### 21
If the trustees of the sub-fund settlement are treated by virtue of paragraph 19 as having become absolutely entitled to money expressed in sterling, for the purposes of this Act—
- (a) the trustees of the principal settlement shall be treated as having disposed of the money at the beginning of the day on which the sub-fund election is treated as having taken effect, and
- (b) the trustees of the sub-fund settlement shall be treated as having acquired the money at the time when the election is treated as having taken effect.
##### 22
- (1) If the trustees of the principal settlement are deemed to have disposed of an asset under section 71(1) (by virtue of paragraph 19), the trustees of the principal settlement shall be treated for the purposes of sections 90 and 94 as having transferred the asset to the trustees of the sub-fund settlement.
- (2) Sub-paragraph (1) also applies where the trustees of the principal settlement would be deemed to have disposed of money expressed in sterling under subsection (1) of section 71 if in that subsection—
- (a) the reference to “assets” were a reference to “property”, and
- (b) for “their” there were substituted “ its ”.
### Share loss relief
##### 125A
- (1) If loss relief under section 573 of the Taxes Act or Chapter 6 of Part 4 of ITA 2007 (“share loss relief”) is obtained in respect of a loss or any part of a loss, no deduction is to be made in respect of the loss or (as the case may be) the part under this Act.
- (2) If a claim is made for share loss relief in respect of a loss accruing on the disposal of shares, section 30 has effect in relation to the disposal as if for the references in subsections (1)(b) and (5) to a tax-free benefit there were substituted references to any benefit whether tax-free or not.
- (3) All such adjustments of corporation tax on chargeable gains or capital gains tax are to be made, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of—
- (a) share loss relief being obtained in respect of an allowable loss, or
- (b) such relief not being obtained in respect of the whole or part of such a loss in respect of which a claim is made.
##### 151BA
- (1) This section applies for the purpose of identifying the securities or shares disposed of in any case where—
- (a) an individual or company (“the investor”) disposes of part of a holding of securities or shares (“the holding”), and
- (b) the holding includes securities or shares to which CITR is attributable in respect of one or more years of assessment or accounting periods that have been held by the investor continuously from the time they were issued until the disposal.
- (2) Any disposal by the investor of securities or shares included in the holding which have been acquired by the investor on different days is treated as relating to those acquired on an earlier day rather than to those acquired on a later day.
- (3) If there is a disposal by the investor of securities or shares included in the holding which have been acquired by the investor on the same day, any of those securities or shares—
- (a) to which CITR is attributable, and
- (b) which have been held by the investor continuously from the time they were issued until the time of disposal,
are treated as disposed of after any other securities or shares included in the holding which were acquired by the investor on that day.
- (4) For the purposes of this section a holding of securities is any number of securities of a company which—
- (a) carry the same rights,
- (b) were issued under the same terms, and
- (c) are held by the investor in the same capacity.
It does not matter for this purpose that the number of the securities grows or diminishes as securities carrying those rights and issued under those terms are acquired or disposed of.
- (5) For the purposes of this section a holding of shares is any number of shares in a company which—
- (a) are of the same class, and
- (b) are held by the investor in the same capacity.
It does not matter for this purpose that the number of the shares grows or diminishes as shares of that class are acquired or disposed of.
- (6) Chapter 1 of Part 4 (share pooling, etc) has effect subject to this section.
- (7) Sections 104 to 107 (which make provision for the identification of securities and shares on a disposal) do not apply to securities or shares to which CITR is attributable.
- (8) In a case to which section 127 (equation of original shares and new holding) applies, shares included in the new holding are treated for the purposes of subsections (2) and (3) as acquired when the original shares were acquired.
- (9) In subsection (8)—
- (a) the reference to section 127 includes a reference to that section as it is applied by virtue of any enactment relating to chargeable gains, and
- (b) “*original shares*” and “*new holding*” have the same meaning as in section 127, or (as the case may be) that section as applied by virtue of the enactment in question.
- (10) In this section and sections 151BB and 151BC—
- (a) if the investor is an individual—
- (i) “*CITR*” has the meaning given by section 333 of ITA 2007,
- (ii) references to CITR being attributable to securities, shares or debentures are to be read in accordance with section 357 of that Act, and
- (iii) references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with section 380 of that Act,
- (b) if the investor is a company—
- (i) “*CITR*” means relief under Part 5 of Schedule 16 to the Finance Act 2002,
- (ii) references to CITR being so attributable are to be read in accordance with paragraph 26 of that Schedule, and
- (iii) references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with paragraph 49 of that Schedule.
##### 151BB
- (1) If—
- (a) an individual or company (“the investor”) holds shares in the CDFI which are of the same class and held in the same capacity (“the existing holding”),
- (b) there is a reorganisation affecting the existing holding as a result of an allotment which—
- (i) falls within section 126(2)(a) (an allotment of shares or debentures in respect of and in proportion to an original holding), and
- (ii) is not an allotment of corresponding bonus shares,
- (c) immediately after the reorganisation, CITR is attributable to the shares included in the existing holding or the shares or debentures allotted in respect of those shares, in respect of one or more years of assessment or accounting periods, and
- (d) if CITR is attributable to the shares included in the existing holding at that time, those shares have been held by the investor continuously from the time they were issued until the reorganisation,
sections 127 to 130 (treatment of share capital following a reorganisation) do not apply in relation to the existing holding.
- (2) Section 116(10) (reorganisations, conversions and reconstructions) does not apply in any case where the old asset consists of shares held (in the same capacity) by the investor—
- (a) that have been held by the investor continuously from the time they were issued until the relevant transaction, and
- (b) to which CITR is attributable immediately before that transaction.
In this subsection “old asset” and “the relevant transaction” have the meaning given by section 116.
- (3) For the purposes of subsection (1)—
- “*corresponding bonus shares*” means bonus shares that—are issued in respect of shares included in the existing holding, andare in the same company, are of the same class, and carry the same rights as, those shares,
- “*reorganisation*” has the meaning given in section 126.
- (4) The following provisions of this Act have effect subject to this section—
- section 116 (reorganisations, conversions and reconstructions);
- Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).
- (5) In this section “the CDFI” is to be read—
- (a) if the investor is an individual, in accordance with section 334(2) of ITA 2007,
- (b) if the investor is a company, in accordance with paragraph 1(2) of Schedule 16 to the Finance Act 2002.
##### 151BC
- (1) If—
- (a) an individual or company (“the investor”) holds shares in or debentures of a company (“company A”),
- (b) there is a reconstruction or amalgamation affecting that holding (“the existing holding”),
- (c) immediately before the reconstruction or amalgamation, CITR is attributable to the shares or debentures included in the existing holding in respect of one or more years of assessment or accounting periods, and
- (d) the shares or debentures included in the existing holding have been held by the investor continuously from the time they were issued until the reconstruction or amalgamation,
sections 135 and 136 (share exchanges and company reconstructions) do not apply in respect of the existing holding.
- (2) Subsection (1)(a) applies only if the shares or debentures are held by the investor in the same capacity.
- (3) For the purposes of subsection (1) a “*reconstruction or amalgamation*” means an issue by a company of shares in or debentures of that company in exchange for or in respect of shares in or debentures of company A.
- (4) The following provisions of this Act have effect subject to this section—
- section 116 (reorganisations, conversions and reconstructions),
- Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).
- (5) The investor is treated as disposing of any securities or shares which but for subsection (1) the investor—
- (a) would be treated as exchanging for other securities or shares by virtue of section 136, or
- (b) would be so treated but for section 137(1) (which restricts section 136 to genuine reconstructions).
##### 256A
- (1) This section applies if a charitable trust has a non-exempt amount under section 540 of ITA 2007 for a year of assessment.
- (2) Attributable gains of the charitable trust for the year of assessment may be attributed to the non-exempt amount but only so far as the non-exempt amount has not been used up.
- (3) The non-exempt amount can be used up (in whole or in part) by—
- (a) attributable gains being attributed to it under this section, or
- (b) attributable income being attributed to it under section 541 of ITA 2007.
- (4) The whole of the non-exempt amount must be used up by—
- (a) attributable gains being attributed to the whole of it under this section,
- (b) attributable income being attributed to the whole of it under section 541 of ITA 2007, or
- (c) a combination of attributable gains being attributed to some of it under this section and attributable income being attributed to the rest of it under section 541 of ITA 2007.
- (5) See section 256B for the way in which gains are to be attributed to the non-exempt amount under this section.
- (6) In this section and section 256B a charitable trust's “attributable income”, and “attributable gains”, for a tax year have the same meaning as in Part 10 of ITA 2007 (see section 540 of that Act).
##### 256B
- (1) This section is about the ways in which attributable gains can be attributed to a non-exempt amount under section 256A.
- (2) The trustees of the charitable trust may specify the attributable gains that are to be attributed to the non-exempt amount.
- (3) A specification under subsection (2) is made by notice to an officer of Revenue and Customs.
- (4) Subsection (6) applies if—
- (a) an officer of Revenue and Customs requires the trustees of a charitable trust to make a specification under this section, and
- (b) the trustees have not given notice under subsection (3) of the specification before the end of the required period.
- (5) The required period is 30 days beginning with the day on which the officer made the requirement.
- (6) An officer of Revenue and Customs may determine the attributable gains that are to be attributed to the non-exempt amount.
### Deduction of trading losses or post-cessation expenditure etc
##### 261B
- (1) A person may make a claim under this section if—
- (a) relief is available to the person under section 64 or 128 of ITA 2007 (trade or employment loss relief against general income) for a tax year in relation to an amount of loss, and
- (b) the person makes a claim under that section for the amount to be deducted in calculating the person's net income for the tax year.
- (2) A person may also make a claim under this section if—
- (a) relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount of loss, but
- (b) the person's total income for the tax year is nil or does not include any income from which the amount can be deducted.
- (3) A claim under this section is for determining so much of the amount of the loss (“*the relevant amount*”) as—
- (a) is not deducted in calculating the person's net income for the tax year, and
- (b) has not already been taken into account for the purposes of any relief for any other tax year or any year of assessment (whether under ITA 2007, this section or otherwise).
- (4) When the relevant amount can no longer be varied—
- (a) by the tribunal on appeal, or
- (b) on the order of a court,
it is treated for the purposes of capital gains tax as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.
- (5) But so much of the relevant amount as exceeds the maximum amount (see section 261C) is not to be treated for the purposes of capital gains tax as an allowable loss.
- (6) The excess may, however, be used in giving effect to any other loss relief under Part 4 of ITA 2007 (depending on the terms of the relief).
- (7) The amount treated as an allowable loss under this section—
- (a) is no longer to be regarded as an amount available for income tax relief, and
- (b) is not to be deductible from chargeable gains accruing to a person in any year of assessment that begins after the person has permanently ceased to carry on the trade, profession, vocation, employment or office in which the loss was made.
- (8) A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the loss was made in the trade, profession, vocation, employment or office.
- (9) In this section “*normal self-assessment filing date*”, “*tax year*” and “*total income*” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).
##### 261C
- (1) For the purposes of section 261B “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if—
- (a) the provisions mentioned below were ignored, and
- (b) no account were taken of the event mentioned below.
- (2) The provisions are—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) section 3(1) (annual exempt amount), and
- (c) section 261B.
- (3) The event is any event—
- (a) which occurs after the date on which the relevant amount (see section 261B(3)) can no longer be varied by the tribunal on appeal or on the order of a court, and
- (b) in consequence of which the amount chargeable to capital gains tax is reduced as a result of an enactment relating to capital gains tax.
##### 261D
- (1) A person may make a claim under this section if—
- (a) relief is available to the person under section 96 or 125 of ITA 2007 (post-cessation trade or property relief) for a tax year in relation to an amount, and
- (b) the person makes a claim under that section to deduct the amount in calculating the person's net income for the tax year.
- (2) A person may also make a claim under this section if—
- (a) relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount, but
- (b) the person's total income for the tax year is nil.
- (3) A claim under this section is for treating for the purposes of capital gains tax so much of the amount as is not deducted in calculating the person's net income for the tax year (“*the relevant amount*”) as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.
- (4) But so much of the relevant amount as exceeds the maximum amount (see section 261E) is not to be treated for the purposes of capital gains tax as an allowable loss.
- (5) The relevant amount is no longer to be regarded as an amount available for income tax relief.
- (6) A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year mentioned in subsection (1) or (2) (as the case may be).
- (7) In this section “*normal self-assessment filing date*”, “*tax year*” and “*total income*” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).
##### 261E
- (1) For the purposes of section 261D “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if the following were ignored.
- (2) The matters to be ignored are—
- (a) any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 2(2),
- (b) section 3(1) (annual exempt amount), and
- (c) any relief under section 261B or 261D.
### Repurchase price under repos
##### 261F
- (1) This section applies if —
- (a) the repurchase price of UK shares, UK securities or overseas securities is treated by section 604(2), (4) or (5) of ITA 2007 (deemed increase in repurchase price: repos and options) as increased for the purposes of section 607 of that Act (treatment of price differences under repos),
- (b) condition A or B is met, and
- (c) section 263A does not apply.
- (2) Condition A is that, as a result of the increase, there is no difference for the purposes of section 607 of that Act between the sale price and the repurchase price.
- (3) Condition B is that, as a result of an exception in section 608 of that Act, section 607 of that Act does not apply.
- (4) The deemed increase of the repurchase price also has effect for capital gains tax purposes.
- (5) Expressions used in this section and in section 605 of ITA 2007 (deemed increase in repurchase price: other income tax purposes) have the same meanings in this section as in that section.
##### 261G
- (1) Subsections (2) and (3) apply if—
- (a) section 607 of ITA 2007 (treatment of price differences under repos) applies,
- (b) an amount is treated under that section as a payment of interest, and
- (c) section 263A does not apply.
- (2) If the repurchase price is more than the sale price, the repurchase price is treated for capital gains tax purposes as reduced by the amount of the payment of interest.
- (3) If the sale price is more than the repurchase price, the repurchase price is treated for capital gains tax purposes as increased by the amount of the payment of interest.
- (4) Expressions used in this section and in section 609 of ITA 2007 (additional income tax consequences of price differences under repos) have the same meanings in this section as in that section.
##### 261H
- (1) The Treasury may by regulations provide for section 261G to apply with modifications if the exception in section 608(2) of ITA 2007 (agreement not at arm's length) would otherwise prevent it from applying.
- (2) Regulations under this section may make different provision for different cases.
- (3) Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.
- (4) The incidental, supplemental, and consequential provision may include modifications of section 261F (deemed manufactured payments: effect on repurchase price).
- (5) In this section “*modifications*” includes exceptions and omissions.
- (6) Accordingly, the power in subsection (1) includes power to provide for any provision of section 261G not to apply in relation to the case mentioned in that subsection.
##### 263F
- (1) The Treasury may by regulations provide for—
- (a) section 261F (deemed manufactured payments: effect on repurchase price),
- (b) section 261G (price differences under repos: effect on repurchase price),
- (c) section 263A (agreements for sale and repurchase of securities),
- (d) section 263D (gains accruing to persons paying manufactured dividends), or
- (e) any of those sections,
to apply with modifications in relation to non-standard repo cases.
- (2) The power in subsection (1) to make provision for section 263A or 263D to apply with modifications is exercisable only so far as the section applies to cases falling within section 607 of ITA 2007 (treatment of price differences under repos).
- (3) A case is a non-standard repo case if—
- (a) there is a repo in respect of securities,
- (b) under the repo there has been a sale (“the original sale”) of the securities by the original owner to the interim holder, and
- (c) any of conditions A to E is met in relation to the repo.
- (4) Condition A is that—
- (a) the obligation to buy back the securities is not performed, or
- (b) the option to buy them back is not exercised.
- (5) Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities.
- (6) Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities.
- (7) Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations.
- (8) Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period—
- (a) beginning immediately after the making of the agreement for the original sale, and
- (b) ending when the repurchase price becomes due.
- (9) Expressions used in this section and in section 612 of ITA 2007 (powers to modify repo provisions: non-standard repo cases) have the same meanings in this section as in that section.
##### 263G
- (1) The Treasury may by regulations provide for—
- (a) section 261F (deemed manufactured payments: effect on repurchase price),
- (b) section 261G (price differences under repos: effect on repurchase price),
- (c) section 263A (agreements for sale and repurchase of securities),
- (d) section 263D (gains accruing to persons paying manufactured dividends), or
- (e) any of those sections,
to apply with modifications in relation to cases involving redemption arrangements.
- (2) The power in subsection (1) to make provision for section 263A or 263D to apply with modifications is exercisable only so far as the section applies to cases falling within section 607 of ITA 2007 (treatment of price differences under repos).
- (3) A case involves redemption arrangements if—
- (a) arrangements, corresponding to those made in cases where there is a repo, are made by an agreement, or one or more related agreements, in relation to securities that are to be redeemed in the period after their sale,
- (b) the securities are UK shares, UK securities or overseas securities, and
- (c) the arrangements are such that the seller or a person connected with the seller (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will result from the redemption.
- (4) Expressions used in this section and in section 613 of ITA 2007 (powers to modify repo provisions: redemption arrangements) have the same meanings in this section as in that section.
##### 263H
- (1) Regulations under section 263F or 263G may make different provision for different cases.
- (2) Regulations under either section may contain incidental, supplemental, consequential and transitional provision and savings.
- (3) The incidental, supplemental and consequential provision may include—
- (a) in the case of regulations about section 261G, modifications of section 261F, and
- (b) in the case of regulations about section 263A or 263D, modifications of the operation of this Act in relation to cases where, by virtue of the regulations, any acquisition or disposal is excluded from those which are to be ignored for the purposes of capital gains tax.
- (4) In this section and sections 263F and 263G “*modifications*” includes exceptions and omissions.
- (5) Accordingly, a power in sections 263F and 263G to provide for a provision to apply with modifications in relation to a particular case includes power to provide for the provision not to apply in relation to that case.
##### 263I
- (1) The Treasury may by regulations make provision as mentioned in subsection (2) about prescribed cases where a person—
- (a) pays or receives a manufactured overseas dividend as mentioned in section 581(1) of ITA 2007 (manufactured overseas dividends), or
- (b) is treated as doing so for any purposes of Chapter 2 of Part 11 of that Act or regulations made under it (manufactured payments).
- (2) The regulations may provide for adjusting a relevant amount by reference to a provision which has effect under the law of a territory outside the United Kingdom.
- (3) A “relevant amount” is an amount which is treated for prescribed capital gains tax purposes as the amount paid or payable to a person in respect of a relevant transaction.
- (4) A “relevant transaction” is a sale, repurchase or other transfer of the overseas securities to which the manufactured overseas dividend relates.
- (5) In this section “*prescribed*” means prescribed in regulations under this section.
- (6) Subject to that, expressions used in this section and in section 582 of ITA 2007 (manufactured payments: powers about manufactured overseas dividends) have the same meanings in this section as in that section.
#### Chargeable event when replacement property owned.
#### Information.
#### Repayment supplements.
##### 285A
- (1) The following rules about European Economic Interest Groupings apply for the purposes of charging tax in respect of chargeable gains—
- *Rule 1*A grouping is treated as acting as the agent of its members.
- *Rule 2*The activities of a grouping are treated as those of its members acting jointly.
- *Rule 3*Each member of a grouping is treated as having a share of the grouping's property, rights and liabilities.
- *Rule 4*Any trade or profession carried on by the grouping is treated as carried on in partnership by members of the grouping.
- *Rule 5*A person is to be regarded as acquiring or disposing of a share of the assets of the grouping not only where there is an acquisition or disposal of assets by the grouping while he is a member of it, but also where he becomes or ceases to be a member of a grouping or there is a change in his share of the property of the grouping.
- (2) For the purposes of Rule 3, a member's share of any property, rights or liabilities of a grouping is determined according to the contract under which the grouping is established.
- (3) If the contract does not provide for this, the member's share is determined by reference to the share of the profits of the grouping to which the member is entitled under the contract.
- (4) If the contract does not provide for this either, the members are treated as having equal shares of the property, rights and liabilities of the grouping.
- (5) “*European Economic Interest Grouping*” means a European Economic Interest Grouping formed under Council Regulation [(EEC) No 2137/85](https://www.legislation.gov.uk/european/regulation/1985/2137) of 25th July 1985, whether registered in Great Britain, Northern Ireland or elsewhere.
##### 16A
- (1) For the purposes of this Act, “*allowable loss*” does not include a loss accruing to a person if—
- (a) it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
- (b) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.
- (2) For the purposes of subsection (1)—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
- “*tax advantage*” means—relief or increased relief from tax,repayment or increased repayment of tax,the avoidance or reduction of a charge to tax or an assessment to tax, orthe avoidance of a possible assessment to tax,and for the purposes of this definition “*tax*” means capital gains tax, corporation tax or income tax.
- (3) For the purposes of subsection (1) it does not matter—
- (a) whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or
- (b) whether the tax advantage is secured for the person to whom the loss accrues or for any other person.
##### 210C
- (1) Section 18(3) does not apply in relation to a loss accruing on the disposal by an insurance company of authorised investment fund assets to the manager of the authorised investment fund.
- (2) In this section—
- “*authorised investment fund assets*” means assets of the company's long-term insurance fund consisting of rights under an authorised unit trust or shares in an open-ended investment company,
- “*the manager of the authorised investment fund*” means—in the case of an authorised unit trust, the person who is the manager of the unit trust scheme for the purposes of Chapter 3 of Part 17 of the Financial Services and Markets Act 2000, andin the case of an open-ended investment company, a director or other person having responsibility for the management of its scheme property, and
- “*open-ended investment company*” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.
##### 263AZA
- (1) A gain accruing to an individual on a disposal of a renewables obligation certificate is not a chargeable gain if—
- (a) the individual acquired the certificate in connection with the generation of electricity by a microgeneration system,
- (b) the system is installed at or near domestic premises occupied by the individual, and
- (c) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.
- (2) In subsection (1)—
- “*domestic premises*” means premises used wholly or mainly as a separate private dwelling,
- “*microgeneration system*” has the same meaning as in section 4 of the Climate Change and Sustainable Energy Act 2006, and
- “*renewables obligation certificate*” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.
##### 140DA
- (1) This section applies where—
- (a) a transfer of assets to which section 140A(1A) or 140C(1A) applies has taken place,
- (b) the transferor and the transferee (or each of the transferees) are each resident in a member State,
- (c) they are not all resident in the same State, and
- (e) the transfer does not constitute or form part of a scheme of reconstruction within the meaning of section 136.
- (2) Where this section applies, the transfer shall be treated for the purposes of section 136 as if it were a scheme of reconstruction.
- (3) Where section 136 applies by virtue of subsection (2) above section 136(6) (and section 137) shall not apply.
### Transparent entities: disapplication of reliefs related to Mergers Directive
##### 140H
- (1) This section applies if—
- (a) a company (“company B”) issues shares or debentures to a person in exchange for shares in or debentures of another company (“company A”),
- (b) the exchange falls within one of the cases specified in section 135(2), and
- (c) either company B or company A or both is a transparent entity.
- (2) Where this section applies—
- (a) “company” in section 135 shall be treated as meaning an entity listed in the Annex to the Mergers Directive, and
- (b) section 135(3) does not apply.
- (3) If, as a result of an exchange in relation to which this section applies, a gain accruing to a person holding shares in or debentures of company A on the exchange would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, Part 18 of the Taxes Act (double taxation relief), including any arrangements having effect by virtue of section 788 of that Act (bilateral relief), shall apply as if that tax, calculated in accordance with subsection (4), had been chargeable.
- (4) Tax is calculated in accordance with this subsection if—
- (a) so far as permitted under the law of the relevant member State, losses arising on the exchange are set against gains arising on the exchange, and
- (b) any relief available to company A under that law has been claimed.
##### 140I
- (1) This section applies in relation to a transfer of a business, or part of a business, where—
- (a) the transfer is of a kind mentioned in section 140A(1) or (1A) (or which would be of such a kind if the business, or the part of the business, transferred were carried on by the transferor in the United Kingdom and the condition mentioned in section 140A(1)(e) were satisfied in relation to the transferee, or each of the transferees), and
- (b) either the transferor or the transferee, or one of the transferees, is a transparent entity.
- (2) Where this section applies—
- (a) if the transferor is a transparent entity, sections 140A and 140DA do not apply in relation to the transfer;
- (b) if a transferee is a transparent entity, section 140DA does not apply in relation to the transfer to it.
- (3) If, as a result of a transfer in relation to which this section applies, a transfer gain would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, Part 18 of the Taxes Act (double taxation relief), including any arrangements having effect by virtue of section 788 of that Act (bilateral relief), shall apply as if that tax, calculated in accordance with subsection (5), had been chargeable.
- (4) In subsection (3) “transfer gain” means a gain accruing to a transparent entity (or which would be treated as accruing to that entity were it not transparent) by reason of the transfer of assets by the transparent entity to the transferee.
- (5) Tax is calculated in accordance with this subsection if—
- (a) so far as permitted under the law of the relevant member State, losses arising on the transfer are set against gains arising on the transfer, and
- (b) any relief available under that law has been claimed.
##### 140J
- (1) This section applies in relation to a merger if—
- (a) the merger is of a kind mentioned in section 140E(1),
- (b) the conditions in section 140E(2) are satisfied in relation to the merger, and
- (c) one or more of the merging companies is a transparent entity.
- (2) Where this section applies—
- (a) if the assets and liabilities of a transparent entity are transferred to another company by reason of the merger, sections 140E and 140G shall not apply;
- (b) if the assets and liabilities of one or more other companies are transferred to a transparent entity by reason of the merger section 140G shall not apply.
- (3) If, as a result of a merger in relation to which this section applies, a merger gain would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, Part 18 of the Taxes Act (double taxation relief), including any arrangements having effect by virtue of section 788 of that Act (bilateral relief) shall apply as if that tax, calculated in accordance with subsection (5), had been chargeable.
- (4) In subsection (3) “merger gain” means a gain accruing to a transparent entity (or which would be treated as accruing to that entity were it not transparent) by reason of the transfer of assets by the transparent entity to another company on the merger.
- (5) Tax is calculated in accordance with this subsection if—
- (a) so far as permitted under the law of the relevant member State, losses arising on the merger are set against gains arising on the merger, and
- (b) any relief available under that law has been claimed.
##### 140K
- (1) This section applies if—
- (a) a transparent entity (“company A”) is a transferee for the purposes of section 140A(1A) or 140E,
- (b) a person (“X”) with an interest in company A was or is also a shareholder or debenture holder of a company (“company B”),
- (c) X became entitled to an interest, or an increased interest, in company A in exchange for a disposal of shares in, or debentures of, company B on a merger to which section 140E applied or on a transfer to which section 140A(1A) applied,
- (d) a chargeable gain accrued to X on the disposal of shares in or debentures of company B,
- (e) in calculating the gain on the shares or debentures account was taken of the value of an asset of company B, and
- (f) X makes a disposal of his interest in the asset.
- (2) In computing the gain accruing to X on a disposal to which subsection (1)(f) applies, the sum allowable as a deduction in accordance with section 38(1)(a) in relation to the interest, or the proportion of the interest, which X acquired on the merger or transfer shall be the value taken into account in computing the gain on the disposal of his shares in, or debentures of, company B.
- (3) In this section a reference to an interest in company A includes—
- (a) an interest in the assets of company A,
- (b) shares in company A, and
- (c) debentures of company A.
##### 140L
- (1) In sections 140A to 140K and this section, unless the contrary intention appears—
- (a) “the Mergers Directive” means Council Directive [90/434/EEC](https://www.legislation.gov.uk/european/directive/1990/0434) of 23rd July 1990 on mergers, transfers &c.,
- (b) “company” means an entity listed as a company in the Annex to the Mergers Directive, and
- (c) “transparent entity” means an entity which is resident in a member State other than the United Kingdom and is listed as a company in the Annex to the Mergers Directive, but—
- (i) does not have an ordinary share capital (within the meaning given by section 832 of the Taxes Act), and
- (ii) if it were resident in the United Kingdom, would not be capable of being a company within the meaning given by the Companies Act 2006.
- (2) For the purposes of those sections and subsection (1) above, a company is resident in a member State if—
- (a) it is within a charge to tax under the law of the State as being resident for that purpose, and
- (b) it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.
#### Company that receives mixed consideration: N does not exceed C
#### De-registration of registered pension schemes
##### 140GA
Sections 24 and 122 do not apply if—
- (a) a merger is effected by the transfer by a company (“the transferor company”) of all of its assets and liabilities to a single company that holds the whole of the ordinary share capital in the transferor company,
- (b) each merging company is resident in a member State,
- (c) the merging companies are not all resident in the same State,
- (d) section 139 does not apply in relation to the transfer, and
- (e) in the course of the merger the transferor company ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986 (c. 55).
##### 14A
- (1) This section applies if—
- (a) by virtue of section 13, part of a chargeable gain that accrues to a company on the disposal of an asset is treated as accruing to an individual in a tax year, and
- (b) the individual is not domiciled in the United Kingdom in that year.
- (2) The part of the chargeable gain treated as accruing to the individual (“the deemed chargeable gain”) is a foreign chargeable gain within the meaning of section 12 if (and only if) the asset is situated outside the United Kingdom.
- (3) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis)—
- (a) treat any consideration obtained by the company on the disposal of the asset as deriving from the deemed chargeable gain, and
- (b) unless the consideration so obtained is of an amount at least equal to the market value of the asset, treat the asset as deriving from the deemed chargeable gain.
- (4) If—
- (a) the deemed chargeable gain is a foreign chargeable gain (within the meaning of section 12),
- (b) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for the year mentioned in subsection (1), and
- (c) any of the deemed chargeable gain is remitted to the United Kingdom in a tax year after that year,
the chargeable gain treated under section 12(2) as accruing may not be reduced or extinguished under section 13(8).
##### 16ZA
- (1) In this section “*the relevant tax year*”, in relation to an individual, means the first tax year for which—
- (a) section 809B of ITA 2007 (claim for remittance basis) applies to the individual, and
- (b) the individual is not domiciled in the United Kingdom.
- (2) An individual may make an election under this section for the relevant tax year (in which case sections 16ZB and 16ZC have effect in relation to the individual for the relevant tax year and all subsequent tax years).
- (3) If an individual does not make such an election, foreign losses accruing to the individual in—
- (a) the relevant tax year, or
- (b) any subsequent tax year except one in which the individual is domiciled in the United Kingdom,
are not allowable losses.
- (4) Sections 42 and 43 of the Management Act (procedure and time limit for making claims), except section 42(1A) of that Act, apply in relation to an election under this section as they apply in relation to a claim for relief.
- (5) An election under this section is irrevocable.
- (6) In this section “*foreign loss*” means a loss accruing from the disposal of an asset situated outside the United Kingdom.
##### 16ZB
- (1) This section applies to an individual for a tax year (“the applicable tax year”) if—
- (a) the individual has made an election under section 16ZA,
- (b) foreign chargeable gains accrued to the individual in or after the relevant tax year (within the meaning of section 16ZA) but before the applicable tax year, and
- (c) by reason of the remission of any of the foreign chargeable gains to the United Kingdom, chargeable gains are treated under section 12 as accruing to the individual in the applicable tax year (“the relevant gains”).
- (2) Section 2(2) or (4) has effect for the applicable tax year as if the relevant gains had not accrued.
- (3) The amount on which the individual is charged to capital gains tax for the applicable tax year is (instead of the amount given by section 2(2) or (4)(b), as reduced under section 3) the sum of—
- (a) the adjusted taxable amount, and
- (b) the amount of the relevant gains.
- (4) “*The adjusted taxable amount*” is—
- (a) if section 3(1) (annual exempt amount) does not apply to the individual for the applicable tax year, the amount given by section 2(2) or (4)(b) as it has effect by virtue of subsection (2), and
- (b) otherwise, so much of that amount as exceeds the exempt amount for the applicable tax year (within the meaning of section 3).
- (5) In subsection (1) “*foreign chargeable gains*” has the meaning given by section 12(4).
- (6) For the purposes of subsection (1)(c) foreign chargeable gains are remitted to the United Kingdom if they are regarded as so remitted for the purposes of section 12.
##### 16ZC
- (1) This section applies to an individual for a tax year if—
- (a) the individual has made an election under section 16ZA for the tax year or any earlier tax year,
- (b) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for the tax year, and
- (c) the individual is not domiciled in the United Kingdom in the tax year.
- (2) The following steps apply for the purpose of calculating the amount on which the individual is to be charged to capital gains tax for the tax year.
- *Step 1*Deduct any relevant allowable losses from the chargeable gains referred to in subsection (3) in the order in which they appear there (starting with paragraph (a) of that subsection).If allowable losses are deductible from the chargeable gains referred to in subsection (3)(b) but are not enough to exhaust them all—those chargeable gains are to be ordered according to the day on which they accrued,the losses are to be deducted from those gains in reverse chronological order (starting with the last chargeable gain to accrue), andif allowable losses are deductible from chargeable gains that accrued on a particular day but are not enough to exhaust all of the chargeable gains that accrued on that day, the amount deducted from each of those chargeable gains is the appropriate proportion of the losses.In paragraph (c) “*the appropriate proportion*”, in relation to a chargeable gain, is the amount of that gain divided by the total amount of the chargeable gains that accrued on the day in question.
- *Step 2*Treat the amount referred to in section 2(2) or (4)(a) or 16ZB(3)(a) as being equal to—the amount it would be if there were no relevant allowable losses, minusthe total amount deducted under Step 1 from chargeable gains within subsection (3)(a) or (c).
- (3) The chargeable gains are—
- (a) foreign chargeable gains accruing to the individual in the tax year, to the extent that they are remitted to the United Kingdom in that year,
- (b) foreign chargeable gains accruing to the individual in that year, to the extent that they are not so remitted in that year, and
- (c) chargeable gains accruing to the individual in that year (other than foreign chargeable gains).
- (4) Chargeable gains treated as accruing under section 87 or 89(2) (read, where appropriate, with section 10A) are not within any paragraph of subsection (3).
- (5) Chargeable gains treated as accruing under section 12 are not within subsection (3)(c).
- (6) For the purposes of subsection (3) foreign chargeable gains are remitted to the United Kingdom if they are regarded as so remitted for the purposes of section 12.
- (7) In this section—
- “*relevant allowable losses*” means the allowable losses that section 2(2) provides may be deducted from chargeable gains accruing to the individual in the tax year, and
- “*foreign chargeable gains*” has the meaning given by section 12(4).
##### 16ZD
- (1) This section applies if section 16ZC applies to an individual for a tax year.
- (2) Any allowable loss deducted under step 1 of section 16ZC(2) is to be regarded (for the purposes of section 2(2)(b)) as allowed as a deduction from chargeable gains accruing to the individual in the tax year.
- (3) If a deduction is made under step 1 of section 16ZC(2) from a foreign chargeable gain within section 16ZC(3)(b), the amount of the foreign chargeable gain is reduced by the amount deducted.
#### Disposals in cases of hire-purchase and similar transactions.
##### 35A
- (1) This section applies for the purposes of capital gains tax in relation to a disposal of an asset if—
- (a) the person making the disposal acquired the asset after 31 March 1982 and before 6 April 2008,
- (b) the disposal by which the person acquired the asset (“the relevant disposal”), and any previous disposal of the asset after 31 March 1982, was a disposal on which, by virtue of any enactment, neither a gain nor a loss accrued to the person making the disposal, and
- (c) section 35(2) did not apply to the relevant disposal.
- (2) It is to be assumed that section 35(2) did apply to the relevant disposal (and that section 56(2) applied to the relevant disposal accordingly).
#### Restriction of losses: long funding leases of plant or machinery
#### Death: application of law in Scotland.
##### 52A
This Chapter applies only for the purposes of corporation tax.
##### 87A
- (1) This section supplements section 87.
- (2) The following steps are to be taken for the purposes of matching capital payments with section 2(2) amounts.
- *Step 1*Find the section 2(2) amount for the relevant tax year.
- *Step 2*Find the total amount of capital payments received by the beneficiaries from the trustees in the relevant tax year.
- *Step 3*The section 2(2) amount for the relevant tax year is matched with—if the total amount of capital payments received in the relevant tax year does not exceed the section 2(2) amount for the relevant tax year, each capital payment so received, andotherwise, the relevant proportion of each of those capital payments.“*The relevant proportion*” is the section 2(2) amount for the relevant tax year divided by the total amount of capital payments received in the relevant tax year.
- *Step 4*If paragraph (a) of Step 3 applies—reduce the section 2(2) amount for the relevant tax year by the total amount of capital payments referred to there, andreduce the amount of those capital payments to nil.If paragraph (b) of that Step applies—reduce the section 2(2) amount for the relevant tax year to nil, andreduce the amount of each of the capital payments referred to there by the relevant proportion of that capital payment.
- *Step 5*Start again at Step 1 (unless subsection (3) applies).If the section 2(2) amount for the relevant tax year (as reduced under Step 4) is not nil, read references to capital payments received in the relevant tax year as references to capital payments received in the latest tax year which—is before the last tax year for which Steps 1 to 4 have been undertaken, andis a tax year in which capital payments (the amounts of which have not been reduced to nil) were received by beneficiaries.If the section 2(2) amount for the relevant tax year (as so reduced) is nil, read references to the section 2(2) amount for the relevant tax year as the section 2(2) amount for the latest tax year—which is before the last tax year for which Steps 1 to 4 have been undertaken, andfor which the section 2(2) amount is not nil.
- (3) This subsection applies if—
- (a) all of the capital payments received by beneficiaries from the trustees in the relevant tax year or any earlier tax year have been reduced to nil, or
- (b) the section 2(2) amounts for the relevant tax year and all earlier tax years have been reduced to nil.
- (4) The effect of any reduction under Step 4 of subsection (2) is to be taken into account in any subsequent application of this section.
##### 87B
- (1) This section applies if—
- (a) chargeable gains are treated under section 87 as accruing to an individual in a tax year,
- (b) section 809B, 809D or 809E (remittance basis) applies to the individual for that year, and
- (c) the individual is not domiciled in the United Kingdom in that year.
- (2) The chargeable gains are foreign chargeable gains within the meaning of section 12 (non-UK domiciled beneficiaries to whom remittance basis applies).
- (3) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis) treat relevant property or benefits as deriving from the chargeable gains.
- (4) For the purposes of subsection (3) property or a benefit is “relevant” if the capital payment by reason of which the chargeable gains are treated as accruing consists of—
- (a) the payment or transfer of the property or its becoming property to which section 60 applies, or
- (b) the conferring of the benefit.
##### 87C
- (1) For the purposes of sections 87 and 87A as they apply in relation to a settlement, no account is to be taken of a capital payment (or a part of a capital payment) within subsection (2).
- (2) A capital payment is within this subsection if (and to the extent that) it is received (or treated as received) in a tax year from the trustees of the settlement by a company that—
- (a) is not resident in the United Kingdom in that year, and
- (b) would be a close company if it were resident in the United Kingdom,
(and is not treated under any of subsections (3) to (5) of section 96 as received by another person).
##### 90A
- (1) Section 90 does not apply to a transfer of settled property made for consideration in money or money's worth if the amount (or value) of that consideration is equal to or exceeds the market value of the property transferred.
- (2) The following provisions apply if—
- (a) section 90 applies to a transfer of settled property made for consideration in money or money's worth, and
- (b) the amount (or value) of that consideration is less than the market value of the property transferred.
- (3) If the transfer is of all of the settled property, for the purposes of section 90 treat the transfer as being of part only of the settled property.
- (4) Deduct the amount (or value) of the consideration from the amount of the market value referred to in section 90(4)(a).
##### 119B
- (1) For the purposes of section 119A reduce the amount that counts as employment income by so much of that amount (if any) as is unremitted foreign securities income.
- (2) In this section “*unremitted foreign securities income*” means income that—
- (a) is foreign securities income for the purposes of section 41A of ITEPA 2003 (employment income from ERS charged on remittance basis), and
- (b) has not been remitted to the United Kingdom by the end of the tax year in which the disposal mentioned in section 119A(1) occurs.
- (3) The following provisions apply if any of the unremitted foreign securities income is remitted to the United Kingdom after the end of the tax year referred to in subsection (2)(b).
- (4) The person liable for the capital gains tax on any chargeable gains arising on the disposal may make a claim for section 119A(2) to have effect as if the remitted income had been remitted before the end of that tax year.
- (5) All adjustments (by way of repayment of tax, assessment or otherwise) are to be made which are necessary to give effect to a claim under subsection (4).
- (6) Those adjustments may be made at any time, despite anything to the contrary in any enactment relating to capital gains tax.
##### 165A
- (1) This section has effect for the interpretation of section 165 (and this section).
- (2) “*Holding company*” means a company that has one or more 51% subsidiaries.
- (3) “*Trading company*” means a company carrying on trading activities whose activities do not include to a substantial extent activities other than trading activities.
- (4) For the purposes of subsection (3) above “*trading activities*” means activities carried on by the company—
- (a) in the course of, or for the purposes of, a trade being carried on by it,
- (b) for the purposes of a trade that it is preparing to carry on,
- (c) with a view to its acquiring or starting to carry on a trade, or
- (d) with a view to its acquiring a significant interest in the share capital of another company that—
- (i) is a trading company or the holding company of a trading group, and
- (ii) if the acquiring company is a member of a group of companies, is not a member of that group.
- (5) Activities do not qualify as trading activities under subsection (4)(c) or (d) above unless the acquisition is made, or the company starts to carry on the trade, as soon as is reasonably practicable in the circumstances.
- (6) The reference in subsection (4)(d) above to the acquisition of a significant interest in the share capital of another company is to an acquisition of ordinary share capital in the other company—
- (a) such as would make that company a 51% subsidiary of the acquiring company, or
- (b) such as would give the acquiring company a qualifying shareholding in a joint venture company without making the two companies members of the same group of companies.
- (7) For the purpose of determining whether a company which has a qualifying shareholding in a joint venture company is a trading company—
- (a) any holding by it of shares in the joint venture company is to be disregarded, and
- (b) it is to be treated as carrying on an appropriate proportion of the activities of the joint venture company or, where the joint venture company is the holding company of a trading group, of the activities of that group;
and in paragraph (b) above “*appropriate proportion*” means a proportion corresponding to the percentage of the ordinary share capital of the joint venture company held by the company.
- (8) “*Trading group*” means a group of companies—
- (a) one or more of whose members carry on trading activities, and
- (b) the activities of whose members, taken together, do not include to a substantial extent activities other than trading activities.
- (9) For the purposes of subsection (8) above “*trading activities*” means activities carried on by a member of the group—
- (a) in the course of, or for the purposes of, a trade being carried on by any member of the group,
- (b) for the purposes of a trade that any member of the group is preparing to carry on,
- (c) with a view to any member of the group acquiring or starting to carry on a trade, or
- (d) with a view to any member of the group acquiring a significant interest in the share capital of another company that—
- (i) is a trading company or the holding company of a trading group, and
- (ii) is not a member of the same group of companies as the acquiring company.
- (10) Activities do not qualify as trading activities under subsection (9)(c) or (d) above unless the acquisition is made, or the group member in question starts to carry on the trade, as soon as is reasonably practicable in the circumstances.
- (11) The reference in subsection (9)(d) above to the acquisition of a significant interest in the share capital of another company is to an acquisition of ordinary share capital in the other company—
- (a) such as would make that company a member of the same group of companies as the acquiring company, or
- (b) such as would give the acquiring company a qualifying shareholding in a joint venture company without making the joint venture company a member of the same group of companies as the acquiring company.
- (12) For the purpose of determining whether a group of companies is a trading group in a case where any one or more members of the group has a qualifying shareholding in a joint venture company which is not a member of the group—
- (a) every holding of shares in the joint venture company by a member of the group having a qualifying shareholding in it is to be disregarded, and
- (b) each member of the group having such a qualifying shareholding is to be treated as carrying on an appropriate proportion of the activities of the joint venture company or, where the joint venture company is a holding company of a trading group, of the activities of that group;
and in paragraph (b) above “*appropriate proportion*” means a proportion corresponding to the percentage of the ordinary share capital of the joint venture company held by the member of the group.
- (13) For the purposes of this section the activities of the members of a group of companies are to be treated as one business (with the result that activities are disregarded to the extent that they are intra-group activities).
- (14) In this section—
- “*51% subsidiary*” has the meaning given by section 838 of the Taxes Act,
- “*group of companies*” means a company which has one or more 51% subsidiaries together with those subsidiaries,
- “*joint venture company*” means a company—which is a trading company or the holding company of a trading group, and75% or more of the ordinary share capital of which (in aggregate) is held by not more than 5 persons (the shareholdings of members of a group of companies being regarded for the purposes of this paragraph as held by a single company),
- “*ordinary share capital*” has the meaning given by section 989 of ITA 2007,
- “*qualifying shareholding*”, in relation to a company and a joint venture company, means—the holding by the company of 10% or more of the ordinary share capital of the joint venture company, or(where the company is a member of a group of companies) the holding by the company and the other members of the group (between them) of 10% or more of that ordinary share capital, and
- “*trade*” means (subject to section 241(3)) anything which—is a trade, profession or vocation, within the meaning of the Income Tax Acts, andis conducted on a commercial basis and with a view to the realisation of profits.
### Chapter 3 — Entrepreneurs’ relief
##### 169H
- (1) This Chapter provides relief from capital gains tax in respect of qualifying business disposals (to be known as “*entrepreneurs' relief*”).
- (2) The following are qualifying business disposals—
- (a) a material disposal of business assets: see section 169I,
- (b) a disposal of trust business assets: see section 169J, and
- (c) a disposal associated with a relevant material disposal: see section 169K.
- (3) But in the case of certain qualifying business disposals, entrepreneurs' relief is given only in respect of disposals of relevant business assets comprised in the qualifying business disposal: see section 169L.
- (4) Section 169M makes provision requiring the making of a claim for entrepreneurs' relief.
- (5) Sections 169N to 169P make provision as to the amount of entrepreneurs' relief.
- (6) Sections 169Q and 169R make provision about reorganisations.
- (7) Section 169S contains interpretative provisions for the purposes of this Chapter.
##### 169I
- (1) There is a material disposal of business assets where—
- (a) an individual makes a disposal of business assets (see subsection (2)), and
- (b) the disposal of business assets is a material disposal (see subsections (3) to (7)).
- (2) For the purposes of this Chapter a disposal of business assets is—
- (a) a disposal of the whole or part of a business,
- (b) a disposal of (or of interests in) one or more assets in use, at the time at which a business ceases to be carried on, for the purposes of the business, or
- (c) a disposal of one or more assets consisting of (or of interests in) shares in or securities of a company.
- (3) A disposal within paragraph (a) of subsection (2) is a material disposal if the business is owned by the individual throughout the period of 1 year ending with the date of the disposal.
- (4) A disposal within paragraph (b) of that subsection is a material disposal if—
- (a) the business is owned by the individual throughout the period of 1 year ending with the date on which the business ceases to be carried on, and
- (b) that date is within the period of 3 years ending with the date of the disposal.
- (5) A disposal within paragraph (c) of subsection (2) is a material disposal if condition A or B is met.
- (6) Condition A is that, throughout the period of 1 year ending with the date of the disposal—
- (a) the company is the individual's personal company and is either a trading company or the holding company of a trading group, and
- (b) the individual is an officer or employee of the company or (if the company is a member of a trading group) of one or more companies which are members of the trading group.
- (7) Condition B is that the conditions in paragraphs (a) and (b) of subsection (6) are met throughout the period of 1 year ending with the date on which the company—
- (a) ceases to be a trading company without continuing to be or becoming a member of a trading group, or
- (b) ceases to be a member of a trading group without continuing to be or becoming a trading company,
and that date is within the period of 3 years ending with the date of the disposal.
- (8) For the purposes of this section—
- (a) an individual who disposes of (or of interests in) assets used for the purposes of a business carried on by the individual on entering into a partnership which is to carry on the business is to be treated as disposing of a part of the business,
- (b) the disposal by an individual of the whole or part of the individual's interest in the assets of a partnership is to be treated as a disposal by the individual of the whole or part of the business carried on by the partnership, and
- (c) at any time when a business is carried on by a partnership, the business is to be treated as owned by each individual who is at that time a member of the partnership.
##### 169J
- (1) There is a disposal of trust business assets where—
- (a) the trustees of a settlement make a disposal of settlement business assets (see subsection (2)),
- (b) there is an individual who is a qualifying beneficiary (see subsection (3)), and
- (c) the relevant condition is met (see subsections (4) and (5)).
- (2) In this Chapter “*settlement business assets*” means—
- (a) assets consisting of (or of interests in) shares in or securities of a company, or
- (b) assets (or interests in assets) used or previously used for the purposes of a business,
which are part of the settled property.
- (3) An individual is a qualifying beneficiary if the individual has, under the settlement, an interest in possession (otherwise than for a fixed term) in—
- (a) the whole of the settled property, or
- (b) a part of it which consists of or includes the settlement business assets disposed of.
- (4) In relation to a disposal of settlement business assets within paragraph (a) of subsection (2) the relevant condition is that, throughout a period of 1 year ending not earlier than 3 years before the date of the disposal—
- (a) the company is the qualifying beneficiary's personal company and is either a trading company or the holding company of a trading group, and
- (b) the qualifying beneficiary is an officer or employee of the company or (if the company is a member of a group of companies) of one or more companies which are members of the trading group.
- (5) In relation to a disposal of settlement business assets within paragraph (b) of that subsection, the relevant condition is that—
- (a) the settlement business assets are used for the purposes of the business carried on by the qualifying beneficiary throughout the period of 1 year ending not earlier than 3 years before the date of the disposal, and
- (b) the qualifying beneficiary ceases to carry on the business on the date of the disposal or within the period of three years before that date.
- (6) In subsection (5)—
- (a) the reference to a business carried on by the qualifying beneficiary includes a business carried on by a partnership of which the qualifying beneficiary is a member, and
- (b) the reference to the qualifying beneficiary ceasing to carry on the business includes the qualifying beneficiary ceasing to be a member of the partnership or the partnership ceasing to carry on the business.
##### 169K
- (1) There is a disposal associated with a relevant material disposal if conditions A, B and C are met.
- (2) Condition A is that an individual makes a material disposal of business assets which consists of—
- (a) the disposal of the whole or part of the individual's interest in the assets of a partnership, or
- (b) the disposal of (or of interests in) shares in or securities of a company.
- (3) Condition B is that the individual makes the disposal as part of the withdrawal of the individual from participation in the business carried on by the partnership or by the company or (if the company is a member of a trading group) a company which is a member of the trading group.
- (4) Condition C is that, throughout the period of 1 year ending with the earlier of—
- (a) the date of the material disposal of business assets, and
- (b) the cessation of the business of the partnership or company,
the assets which (or interests in which) are disposed of are in use for the purposes of the business.
- (5) For the purposes of this Chapter the disposal mentioned in Condition B is the disposal associated with a relevant material disposal.
##### 169L
- (1) If a qualifying business disposal is one which does not consist of the disposal of (or of interests in) shares in or securities of a company, entrepreneurs' relief is given only in respect of the disposal of relevant business assets comprised in the qualifying business disposal.
- (2) In this Chapter “*relevant business assets*” means assets (including goodwill) which are, or are interests in, assets to which subsection (3) applies, other than excluded assets (see subsection (4) below).
- (3) This subsection applies to assets which—
- (a) in the case of a material disposal of business assets, are assets used for the purposes of a business carried on by the individual or a partnership of which the individual is a member,
- (b) in the case of a disposal of trust business assets, are assets used for the purposes of a business carried on by the qualifying beneficiary or a partnership of which the qualifying beneficiary is a member, or
- (c) in the case of a disposal associated with a relevant material disposal, are assets used for the purposes of a business carried on by the partnership or company.
- (4) The following are excluded assets—
- (a) shares and securities, and
- (b) assets, other than shares or securities, which are held as investments.
##### 169M
- (1) Entrepreneurs' relief is to be given only on the making of a claim.
- (2) A claim for entrepreneurs' relief in respect of a qualifying business disposal must be made—
- (a) in the case of a disposal of trust business assets, jointly by the trustees and the qualifying beneficiary, and
- (b) otherwise, by the individual.
- (3) A claim for entrepreneurs' relief in respect of a qualifying business disposal must be made on or before the first anniversary of the 31 January following the tax year in which the qualifying business disposal is made.
- (4) A claim for entrepreneurs' relief in respect of a qualifying business disposal may only be made if the amount resulting under section 169N(1) is a positive amount.
##### 169N
- (1) Where a claim is made in respect of a qualifying business disposal—
- (a) the relevant gains (see subsection (5)) are to be aggregated, and
- (b) any relevant losses (see subsection (6)) are to be aggregated and deducted from the aggregate arrived at under paragraph (a).
- (2) The resulting amount is to be reduced by 4/9ths.
- (3) But if the aggregate of—
- (a) the amount resulting under subsection (1), and
- (b) the total of the amounts resulting under that subsection by virtue of its operation in relation to earlier relevant qualifying business disposals (if any),
exceeds £1 million, the reduction is to be made in respect of only so much (if any) of the amount resulting under subsection (1) as (when added to that total) does not exceed £1 million.
- (4) The amount arrived at under subsections (1) to (3) is to be treated for the purposes of this Act as a chargeable gain accruing at the time of the disposal to the individual or trustees by whom the claim is made.
- (5) In subsection (1)(a) “*relevant gains*” means—
- (a) if the qualifying business disposal is of (or of interests in) shares in or securities of a company (or both), the gains accruing on the disposal (computed in accordance with the provisions of this Act fixing the amount of chargeable gains), and
- (b) otherwise, the gains accruing on the disposal of any relevant business assets comprised in the qualifying business disposal (so computed).
- (6) In subsection (1)(b) “*relevant losses*” means—
- (a) if the qualifying business disposal is of (or of interests in) shares in or securities of a company (or both), any losses accruing on the disposal (computed in accordance with the provisions of this Act fixing the amount of allowable losses, on the assumption that notice has been given under section 16(2A) in respect of them), and
- (b) otherwise, any losses accruing on the disposal of any relevant business assets comprised in the qualifying business disposal (so computed, on that assumption).
- (7) In subsection (3) “*earlier relevant qualifying business disposals*” means—
- (a) where the qualifying business disposal is made by an individual, earlier qualifying business disposals made by the individual and earlier disposals of trust business assets in respect of which the individual is the qualifying beneficiary, and
- (b) where the qualifying business disposal is a disposal of trust business assets in respect of which an individual is the qualifying beneficiary, earlier disposals of trust business assets in respect of which that individual is the qualifying beneficiary and earlier qualifying business disposals made by that individual.
- (8) If, on the same day, there is both a disposal of trust business assets in respect of which an individual is the qualifying beneficiary and a qualifying business disposal by the individual, this section applies as if the disposal of trust business assets were later.
- (9) Any gain or loss taken into account under subsection (1) is not to be taken into account under this Act as a chargeable gain or an allowable loss.
##### 169O
- (1) This section applies where, on a disposal of trust business assets, there is (in addition to the qualifying beneficiary) at least one other beneficiary who, at the material time, has an interest in possession in—
- (a) the whole of the settled property, or
- (b) a part of it which consists of or includes the shares or securities (or interests in shares or securities) or assets (or interests in assets) disposed of.
- (2) Only the relevant proportion of the amount which would otherwise result under subsection (1) of section 169N is to be treated as so resulting.
- (3) And the balance of that amount, with no reduction under subsection (2) of that section, is accordingly a chargeable gain for the purposes of this Act.
- (4) For the purposes of this section “the relevant proportion” of an amount is the same proportion of the amount as that which, at the material time—
- (a) the qualifying beneficiary's interest in the income of the part of the settled property comprising the shares or securities (or interests in shares or securities) or assets (or interests in assets) disposed of, bears to
- (b) the interests in that income of all the beneficiaries (including the qualifying beneficiary) who then have interests in possession in that part of the settled property.
- (5) In subsection (4) “*the qualifying beneficiary's interest*” means the interest by virtue of which he is the qualifying beneficiary (and not any other interest the qualifying beneficiary may have).
- (6) In this section “*the material time*” means the end of the latest period of 1 year which ends not earlier than 3 years before the date of the disposal and—
- (a) in the case of a disposal of settlement business assets within paragraph (a) of subsection (2) of section 169J, throughout which the conditions in paragraphs (a) and (b) of subsection (4) of that section are met, and
- (b) in the case of a disposal of settlement business assets within paragraph (b) of subsection (2) of that section, throughout which the business is carried on by the qualifying beneficiary.
##### 169P
- (1) This section applies where, on a disposal associated with a relevant material disposal, any of the conditions in subsection (4) is met.
- (2) Only such part of the amount which would otherwise result under subsection (1) of section 169N as is just and reasonable is to be treated as so resulting.
- (3) And the balance of that amount, with no reduction under subsection (2) of that section, is accordingly a chargeable gain for the purposes of this Act.
- (4) The conditions referred to in subsection (1) are—
- (a) that the assets which (or interests in which) are disposed of are in use for the purposes of the business for only part of the period in which they are in the ownership of the individual,
- (b) that only part of the assets which (or interests in which) are disposed of are in use for the purposes of the business for that period,
- (c) that the individual is concerned in the carrying on of the business (whether personally, as a member of a partnership or as an officer or employee of a company which is the individual's personal company) for only part of the period in which the assets which (or interests in which) are disposed of are in use for the purposes of the business, and
- (d) that, for the whole or any part of the period for which the assets which (or interests in which) are disposed of are in use for the purposes of the business, their availability is dependent on the payment of rent.
- (5) In determining how much of an amount it is just and reasonable to bring into account under subsection (2) regard is to be had to—
- (a) in a case within paragraph (a) of subsection (4), the length of the period for which the assets are in use as mentioned in that paragraph,
- (b) in a case within paragraph (b) of that subsection, the part of the assets that are in use as mentioned in that paragraph,
- (c) in a case within paragraph (c) of that subsection, the length of the period for which the individual is concerned in the carrying on of the business as mentioned in that paragraph, and
- (d) in a case within paragraph (d) of that subsection, the extent to which any rent paid is less than the amount which would be payable in the open market for the use of the assets.
##### 169Q
- (1) This section applies where—
- (a) there is a reorganisation (within the meaning of section 126), and
- (b) the original shares and the new holding (within the meaning of that section) would fall to be treated by virtue of section 127 as the same asset.
- (2) If an election is made under this section, a claim for entrepreneurs' relief may be made as if the reorganisation involved a disposal of the original shares; and if such a claim is made section 127 does not apply.
- (3) An election under this section must be made—
- (a) if the reorganisation would (apart from section 127) involve a disposal of trust business assets, jointly by the trustees and the qualifying beneficiary, and
- (b) otherwise, by the individual.
- (4) An election under this section must be made on or before the first anniversary of the 31 January following the tax year in which the reorganisation takes place.
- (5) The references in this section to a reorganisation (within the meaning of section 126) includes an exchange of shares or securities which is treated as such a reorganisation by virtue of section 135 or 136.
##### 169R
- (1) This section applies where the calculation under section 116(10)(a) has effect to produce a chargeable gain for an individual by reason of a relevant transaction.
- (2) This Chapter has effect as if—
- (a) (despite section 116(10)) the relevant transaction were a disposal, and
- (b) the disposal were a disposal of business assets consisting of the old asset made by the individual at the time of the relevant transaction.
- (3) Where the disposal would be a material disposal of business assets and entrepreneurs' relief is claimed in respect of it—
- (a) the amount resulting under section 169N(1) is to be taken to be the amount of the chargeable gain produced by the calculation under section 116(10)(a), and
- (b) accordingly, the amount arrived at under section 169N(1) to (3) (or a corresponding part of it) is the amount deemed to accrue by virtue of section 116(10)(b) on a disposal of the whole or part of the new asset.
- (4) In this section “new asset”, “old asset” and “relevant transaction” have the meaning given by section 116.
##### 169S
- (1) For the purposes of this Chapter “*a business*” means anything which—
- (a) is a trade, profession or vocation, and
- (b) is conducted on a commercial basis and with a view to the realisation of profits.
- (2) References in this Chapter to a disposal of an interest in shares in a company include a disposal of an interest in shares treated as made by virtue of section 122.
- (3) For the purposes of this Chapter “*personal company*”, in relation to an individual, means a company—
- (a) at least 5% of the ordinary share capital of which is held by the individual, and
- (b) at least 5% of the voting rights in which are exercisable by the individual by virtue of that holding.
- (4) For the purposes of subsection (3) if the individual holds any shares in the company jointly or in common with one or more other persons, the individual is to be treated as sole holder of so many of them as is proportionate to the value of the individual's share (and as able to exercise voting rights by virtue of that holding).
- (5) In this Chapter—
- “*disposal associated with a relevant material disposal*” has the meaning given by section 169K,
- “*disposal of business assets*” has the meaning given by section 169I(2),
- “*disposal of trust business assets*” has the meaning given by section 169J,
- “*employment*” has the meaning given by section 4 of ITEPA 2003,
- “*entrepreneurs' relief*” has the meaning given by section 169H(1),
- “*holding company*” has the same meaning as in section 165 (see section 165A),
- “*material disposal of business assets*” has the meaning given by section 169I,
- “*office*” has the meaning given by section 5(3) of ITEPA 2003,
- “*ordinary share capital*” has the same meaning as in the Income Tax Acts (see section 989 of ITA 2007),
- “*qualifying business disposal*” has the meaning given by section 169H(2),
- “*relevant business asset*” has the meaning given by section 169L,
- “*rent*”, in relation to an asset, includes any form of consideration given for the use of the asset,
- “*securities*”, in relation to a company, includes any debentures of the company which are deemed by subsection (6) of section 251 to be securities for the purposes of that section,
- “*settlement business assets*” has the meaning given by section 169J(2),
- “*trade*” has the same meaning as in the Income Tax Acts (see section 989 of ITA 2007), and
- “*trading company*” and “*trading group*” have the same meaning as in section 165 (see section 165A).
#### Sections 184A and 184B: meaning of “qualifying change of ownership”
#### Location of certain intangible assets
#### Effect of election under section 279A
#### Elections under section 279A
### Application of Schedule
##### A1
This Schedule applies only for the purposes of corporation tax.
### Outstanding section 2(2) amounts
##### 1A
- (1) The following steps are to be taken for the purpose of calculating the section 2(2) amounts for a settlement that are outstanding at the end of a tax year (“the relevant tax year”).
- *Step 1*Find the section 2(2) amount for the settlement for the relevant tax year and earlier tax years, as reduced under section 87A as it applies for the relevant tax year and earlier tax years.
- *Step 2*This Step applies if, by virtue of the matching of the section 2(2) amount for the settlement for a tax year (“the applicable year”) with a capital payment, chargeable gains are treated under section 87 or 89(2) as accruing in the relevant tax year to a beneficiary who is not chargeable to tax for that year.Increase the section 2(2) amount for the applicable year (found under Step 1) by the amount of the chargeable gains.
- (2) For the purposes of Step 1 of sub-paragraph (1) take into account the effect of section 90 in relation to any transfer of settled property from or to the trustees of the settlement made in or before the relevant tax year.
- (3) For the purposes of this Schedule a beneficiary is “chargeable to tax” for a tax year if the beneficiary is resident or ordinarily resident in the United Kingdom in that year.
### Attribution of gains: remittance basis
##### 8AA
Section 87B (remittance basis) applies in relation to chargeable gains treated under paragraph 8 as accruing as it applies in relation to chargeable gains treated under section 87 as accruing.
##### 116A
- (1) Section 116 applies in accordance with the following assumptions if—
- (a) a holding that is a relevant holding for the purposes of section 490 of CTA 2009 (holdings in OEICs, unit trusts and offshore funds treated as creditor relationship rights) is held by a company both at the end of one accounting period and at the beginning of the next, and
- (b) that section applies to the holding for one of those periods but not for the other.
- (2) The assumptions in subsections (3) and (4) apply for the purposes of this Act if the accounting period for which section 490 of CTA 2009 applies to the relevant holding is the first of those periods.
- (3) The relevant holding is assumed to have ceased to be a relevant holding for the second of those periods as a result of a transaction such as is mentioned in section 116(1) (“the reorganisation transaction”) occurring at the beginning of that period.
- (4) In relation to the reorganisation transaction within subsection (3), for the purposes of section 116—
- (a) the relevant holding immediately before the beginning of the second of those periods is assumed to be the old asset, and
- (b) the relevant holding immediately after the beginning of that period is assumed to be the new asset.
- (5) The assumptions in subsections (6) and (8) apply for the purposes of this Act if the accounting period for which section 490 of CTA 2009 applies to the relevant holding is the second of those periods.
- (6) The holding is assumed to have become a relevant holding for the second of those periods as a result of the occurrence at the end of first period of a transaction such as is mentioned in section 116(1).
- (7) But subsection (6) does not apply if the first of those periods is a period at the end of which a disposal of the relevant holding is treated as having occurred under section 212 (annual deemed disposal of holdings of unit trusts etc by insurance companies).
- (8) In relation to the reorganisation transaction within subsection (6), for the purposes of section 116—
- (a) the relevant holding immediately before the beginning of the second of those periods is assumed to be the old asset, and
- (b) the relevant holding immediately after the beginning of that period is assumed to be the new asset.
##### 116B
- (1) If at any time section 521B of CTA 2009 (application of Part 5 of that Act to certain shares as rights under a creditor relationship) begins or ceases to apply in the case of a share held by the investing company it is treated for the purposes of this Act—
- (a) as having disposed of the share immediately before that time for consideration of an amount equal to the notional carrying value of the share at that time, and
- (b) as having immediately reacquired it for consideration of the same amount.
- (2) In this section—
- “*notional carrying value*” has the same meaning as in subsection (2) of section 521F of CTA 2009 (see subsection (3) of that section),
- “*investing company*” has the same meaning as it has for the purposes of Chapter 6A of Part 6 of that Act (shares accounted for as liabilities) (see section 521A(3) of that Act).
##### 151E
- (1) The Treasury may by regulations make provision for or in connection with bringing into account in prescribed circumstances for the purposes of this Act amounts to which section 328(1) of CTA 2009 does not apply because of section 328(3) or (4) of that Act.
- (2) The regulations may—
- (a) make different provision for different cases, and
- (b) make provision subject to an election or to other prescribed conditions.
##### 151F
- (1) This section applies if under arrangements to which section 503 (purchase and resale arrangements), 504 (diminishing shared ownership arrangements) or 507 (investment bond arrangements) of CTA 2009 applies an asset is sold by one party to the arrangements to the other party.
- (2) The alternative finance return (as defined in section 511, 512 or 513(3) of that Act, as the case may be) is excluded in determining for the purposes of this Act the consideration for the sale and purchase of the asset.
- (3) This section does not affect the operation of any provision of this Act or the Tax Acts which provides that the consideration for a sale or purchase is to be taken for any purpose to be an amount other than the actual consideration.
##### 151G
- (1) If the Treasury make regulations under section 533 of CTA 2009 (power to change conditions for non-qualifying shares) adding, varying or removing such a condition as is mentioned in subsection (1) of that section, they may also by regulations amend this Act so as to make provision for or in connection with taxation in the case of any asset or transaction that is or was mentioned in the condition.
- (2) Regulations under this section may—
- (a) make different provision for different cases, and
- (b) make incidental, supplemental, consequential and transitional provisions and savings.
- (3) Regulations made under subsection (2)(b) may, in particular, include provision amending any enactment or any instrument made under an enactment.
##### 156ZA
- (1) This section applies if a company is entitled to relief under Chapter 7 of Part 8 of CTA 2009 (roll-over relief in case of realisation and reinvestment) as a result of—
- (a) section 898 of that Act (roll-over relief where pre-FA 2002 assets disposed of on or after 1 April 2002), or
- (b) section 899 of that Act (roll-over relief where degrouping charge on pre-FA 2002 asset arises on or after 1 April 2002).
- (2) The company is treated for the purposes of this Act as if the consideration for the disposal of the old asset were reduced by the amount available for relief.
- (3) Subsection (2) does not affect the treatment for any purpose of the Taxes Acts of the other party to any transaction involved in the disposal of the old asset or the expenditure on other assets.
- (4) In this section—
- “*the old asset*” has the same meaning as in Chapter 7 of Part 8 of CTA 2009 (see section 754(2)), and
- “*the Taxes Acts*” means the enactments relating to income tax, corporation tax or chargeable gains.
##### 156ZB
- (1) This section applies if there is a disposal on or after 1 April 2002 of an asset that is both—
- (a) an asset of a class specified in section 155, and
- (b) an intangible fixed asset for the purposes of Part 8 of CTA 2009.
- (2) The period specified in section 152(3)—
- (a) does not include any period beginning on or after 1 April 2002, and
- (b) may not be extended so as to include any such period.
- (3) Classes 4 to 7A in section 155 do not apply for the purposes of corporation tax as respects the acquisition of new assets that are chargeable intangible assets for the purposes of Part 8 of CTA 2009 (see section 741 of that Act).
- (4) In the case of an acquisition before 22 March 2005, subsection (3) applies as if it referred to Classes 4 to 7, instead of Classes 4 to 7A.
#### Information.
#### Treating trade loss etc as CGT loss
##### 68A
- (1) In this Act, unless the context otherwise requires—
- (a) “*settlor*” in relation to a settlement means the person, or any of the persons, who has made, or is treated for the purposes of this Act as having made, the settlement, and
- (b) a person is a settlor of property which—
- (i) is settled property by reason of his having made the settlement (or by reason of an event which causes him to be treated under this Act as having made the settlement), or
- (ii) derives from property to which sub-paragraph (i) applies.
- (2) A person is treated for the purposes of this Act as having made a settlement if—
- (a) he has made or entered into the settlement, directly or indirectly, or
- (b) the settled property, or property from which the settled property is derived, is or includes property of which he was competent to dispose immediately before his death, and the settlement arose on his death, whether by will, on his intestacy, or otherwise.
- (3) A person is, in particular, treated for the purposes of this Act as having made a settlement if—
- (a) he has provided property directly or indirectly for the purposes of the settlement, or
- (b) he has undertaken to provide property directly or indirectly for the purposes of the settlement.
- (4) Where one person (A) makes or enters into a settlement in accordance with reciprocal arrangements with another person (B), for the purposes of this Act—
- (a) B shall be treated as having made the settlement, and
- (b) A shall not be treated as having made the settlement by reason only of the reciprocal arrangements.
- (5) In subsection (2)(b) “*property of which he was competent to dispose immediately before his death*” shall be construed in accordance with section 62(10) (reading each reference to “assets” as a reference to “property”).
- (6) A person who has been a settlor in relation to a settlement shall be treated for the purposes of this Act as having ceased to be a settlor in relation to the settlement if—
- (a) no property of which he is a settlor is comprised in the settlement,
- (b) he has not undertaken to provide property directly or indirectly for the purposes of the settlement in the future, and
- (c) he has not made reciprocal arrangements with another person for that other person to enter into the settlement in the future.
- (7) For the purpose of this section and sections 68B and 68C property is derived from other property—
- (a) if it derives (directly or indirectly and wholly or partly) from that property or any part of it, and
- (b) in particular, if it derives (directly or indirectly and wholly or partly) from income from that property or any part of it.
- (8) In this section “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable.
##### 68B
- (1) This section applies in relation to a transfer of property from the trustees of one settlement (“Settlement 1”) to the trustees of another (“Settlement 2”) otherwise than—
- (a) for full consideration, or
- (b) by way of a bargain made at arm's length.
- (2) In this section “*transfer of property*” means—
- (a) a disposal of property by the trustees of Settlement 1, and
- (b) the acquisition by the trustees of Settlement 2 of—
- (i) property disposed of by the trustees of Settlement 1, or
- (ii) property created by the disposal;
and a reference to transferred property is a reference to property acquired by the trustees of Settlement 2 on the disposal.
- (3) For the purposes of this Act, except where the context otherwise requires—
- (a) the settlor (or each settlor) of the property disposed of by the trustees of Settlement 1 shall be treated from the time of the disposal as having made Settlement 2, and
- (b) if there is more than one settlor of the property disposed of by the trustees of Settlement 1, each settlor shall be treated in relation to Settlement 2 as the settlor of a proportionate part of the transferred property.
- (4) For the purposes of this Act, except where the context otherwise requires, if and to the extent that the property disposed of by the trustees of Settlement 1 was provided for the purposes of Settlement 1, or is derived from property provided for the purposes of Settlement 1, the transferred property shall be treated from the time of the disposal as having been provided for the purposes of Settlement 2.
- (5) If transferred property is treated by virtue of subsection (4) as having been provided for the purposes of Settlement 2 —
- (a) the person who provided the property disposed of by the trustees of Settlement 1, or property from which it was derived, for the purposes of Settlement 1 shall be treated as having provided the transferred property, and
- (b) if more than one person provided the property disposed of by the trustees of Settlement 1, or property from which it was derived, for the purposes of Settlement 1, each of them shall be treated as having provided a proportionate part of the transferred property.
- (6) But subsections (3) and (4) do not apply in relation to a transfer of property—
- (a) which occurs by reason only of the assignment or assignation by a beneficiary under Settlement 1 of an interest in that settlement to the trustees of Settlement 2,
- (b) which occurs by reason only of the exercise of a general power of appointment, or
- (c) to which section 68C(6) applies.
- (7) In determining whether this section applies in relation to a transfer of property between settlements, section 18(2) shall be disregarded.
#### Restrictions on buying losses: tax avoidance schemes
#### Sections 184A and 184B: meaning of “tax advantage”
#### Interpretation of sections 194 to 195E .
#### Deferred unascertainable consideration: election for treatment of loss
#### Effect of election under section 279A
##### 25A
- (1) This section applies where plant or machinery is used for the purpose of leasing under a long funding lease.
- (2) The lessor shall be deemed for all purposes of this Act—
- (a) to have disposed of the plant or machinery at the commencement of the term of the lease at the relevant disposal value, and
- (b) to have immediately reacquired it at the same value.
- (3) The lessor shall also be deemed for all purposes of this Act—
- (a) to have disposed of the plant or machinery on the termination of the lease for a consideration equal to the termination amount, and
- (b) to have immediately reacquired it for the same consideration.
- (4) “*Relevant disposal value*” means—
- (a) in relation to a long funding finance lease, the disposal value described in item 5A of the table in section 61(2) of the Capital Allowances Act (disposal values), and
- (b) in relation to a long funding operating lease, the disposal value described in item 5B of that table.
- (5) For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—
- “*commencement*”, in relation to the term of a lease,
- “lessor”,
- “long funding lease”,
- “long funding finance lease”,
- “long funding operating lease”,
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*the term*”, in relation to a lease,
- “termination”,
- “termination amount”.
##### 41A
- (1) This section applies where a person disposes of an asset—
- (a) which includes plant or machinery which is a fixture for the purposes of Chapter 6A of Part 2 of the Capital Allowances Act, and
- (b) which he has used for the purpose of leasing under one or more long funding leases.
- (2) In the computation of the amount of a loss accruing to the person on the disposal there shall be excluded from the sums allowable as a deduction by virtue of section 38(1)(a) and (b) (acquisition and enhancement costs) an amount determined in accordance with subsection (3) or (4).
- (3) Where the person has used the plant or machinery for the purpose of leasing under one long funding lease, the amount is equal to the fall in value of the plant or machinery during the period of the lease.
- (4) Where the person has used the plant or machinery for the purpose of leasing under more than one long funding lease, the amount is equal to the sum of the fall in value of the plant or machinery during the period of each lease.
- (5) In this section, references to the fall in value of plant or machinery during the period of a lease are references to the amount (if any) by which—
- (a) the market value of the plant or machinery at the commencement of the term of the lease,
exceeds
- (b) its market value at the termination of the lease.
- (6) For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—
- “*commencement*”, in relation to the term of a lease,
- “long funding lease”,
- “market value”,
- “*the term*”, in relation to a lease,
- “termination”.
##### 63A
- (1) The provisions of this Act, so far as relating to the consequences of the death of a person to whom property in Northern Ireland stands limited for life (“*the deceased*”), shall have effect subject to the provisions of this section.
- (2) A person who acquires property in fee simple absolute or fee tail in possession as a consequence of the deceased's death shall be deemed to have acquired all the assets forming part of the property at the date of the deceased's death for a consideration equal to their market value at that date.
##### 68C
#### Consideration payable by instalments.
##### 286A
Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of companies) applies for the purposes of—
- (a) this Act (so far as relating to capital gains tax), and
- (b) any other enactment relating to capital gains tax,
as it applies for the purposes of the Corporation Tax Acts.
##### 225B
- (1) Where an individual—
- (a) ceases to live with his spouse or civil partner in a dwelling-house or part of a dwelling-house which is their only or main residence, and
- (b) subsequently disposes of, or of an interest in, the dwelling-house or part to the spouse or civil partner,
then, if conditions A to C are met, sections 222 to 224 shall apply as if the dwelling-house or part continued to be the individual’s only or main residence until the disposal.
- (2) Condition A is that the disposal mentioned in subsection (1)(b) is pursuant to—
- (a) an agreement between the individual and his spouse or civil partner made in contemplation of or otherwise in connection with the dissolution or annulment of the marriage or civil partnership, their judicial separation or the making of a separation order in respect of them, or their separation in other circumstances such that the separation is likely to be permanent, or
- (b) an order of a court—
- (i) made on granting an order or a decree of divorce or nullity of marriage, for the dissolution or annulment of the civil partnership, or for judicial separation,
- (ii) made in connection with the dissolution or annulment of the marriage or civil partnership or the parties’ judicial separation and which is made at any time after the granting of such an order or decree,
- (iii) made at any time under section 22A, 23, 23A, 24 or 24A of the Matrimonial Causes Act 1973,
- (iv) made at any time under article 25 or 26 of the Matrimonial Causes (Northern Ireland) Order 1978,
- (v) made under section 8 of the Family Law (Scotland) Act 1985, including incidental orders made by virtue of section 14 of that Act, or
- (vi) made at any time under any provision of Schedule 5 to the Civil Partnership Act 2004 that corresponds to any of the provisions mentioned in paragraphs (iii) and (iv).
- (3) Condition B is that in the period between the individual ceasing to reside in the dwelling-house or part of the dwelling-house and the disposal to the spouse or civil partner, the dwelling-house or part continues to be the only or main residence of the spouse or civil partner.
- (4) Condition C is that the individual has not given notice under section 222(5) that another dwelling-house or part of a dwelling-house is to be treated as the individual’s main residence for any part of that period.
- (5) Section 223 (as applied by this section) shall apply only on the making of a claim by the individual.
##### 225C
- (1) This section applies where—
- (a) a disposition of property following a person's death is varied, and
- (b) section 62(6) applies in respect of the variation.
- (2) Where property becomes settled property in consequence of the variation (and would not, but for the variation, have become settled property), a person mentioned in subsection (3) shall be treated for the purposes of this Act, except where the context otherwise requires—
- (a) as having made the settlement, and
- (b) as having provided the property for the purposes of the settlement.
- (3) Those persons are—
- (a) a person who immediately before the variation was entitled to the property, or to property from which it derives, absolutely as legatee,
- (b) a person who would have become entitled to the property, or to property from which it derives, absolutely as legatee but for the variation,
- (c) a person who immediately before the variation would have been entitled to the property, or to property from which it derives, absolutely as legatee but for being an infant or other person under a disability, and
- (d) a person who would, but for the variation, have become entitled to the property, or to property from which it derives, absolutely as legatee if he had not been an infant or other person under a disability.
- (4) In subsection (3) references to a person being entitled to property absolutely as legatee shall be construed in accordance with section 64(3) (reading the references to “an asset” and “any asset” as references to “property”).
- (5) Where—
- (a) property would have become comprised in a settlement—
- (i) which arose on the deceased person's death (whether in accordance with his will, on his intestacy or otherwise), or
- (ii) which was already in existence on the deceased person's death (whether or not the deceased person was a settlor in relation to that settlement), but
- (b) in consequence of the variation the property, or property derived from it, becomes comprised in another settlement,
the deceased person shall be treated for the purposes of this Act, except where the context otherwise requires, as having made the other settlement.
- (6) Where—
- (a) immediately before the variation property is comprised in a settlement and is property of which the deceased person is a settlor, and
- (b) immediately after the variation the property, or property derived from it, becomes comprised in another settlement,
the deceased person shall be treated for the purposes of this Act, except where the context otherwise requires, as having made the other settlement.
- (7) If a person is treated as having made a settlement under subsection (5) or (6), for the purposes of this Act he shall be treated as having made the settlement immediately before his death.
- (8) But subsection (7) does not apply in relation to a settlement which arose on the person's death.
##### 69A
Schedule 4ZA (which makes provision about sub-fund settlements) shall have effect.
### Restrictions on buying losses or gains etc
##### 184A
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if—
- (a) at any time (“*the relevant time*”) there is a qualifying change of ownership in relation to a company (“*the relevant company*”) (see section 184C),
- (b) a loss (a “qualifying loss”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)),
- (c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage (see section 184D), and
- (d) the advantage involves the deduction of a qualifying loss from any chargeable gains (whether or not it also involves anything else).
- (2) A qualifying loss accruing to a company is not to be deductible from chargeable gains accruing to the company ... .
- (3) In this section a “*pre-change asset*” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F).
- (4) In this section “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
- (5) For the purposes of this section it does not matter—
- (a) whether a qualifying loss accrues before, after or at the relevant time,
- (b) whether a qualifying loss accrues at a time when there are no chargeable gains from which it could be deducted (or could otherwise have been deducted), or
- (c) whether the tax advantage is secured for the company to which a qualifying loss accrues or for any other company.
##### 184B
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if—
- (a) at any time (“*the relevant time*”) there is a qualifying change of ownership in relation to a company (“*the relevant company*”) (see section 184C),
- (b) a gain (a “qualifying gain”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)),
- (c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, and
- (d) the advantage involves the deduction of a loss from a qualifying gain (whether or not it also involves anything else).
- (2) In the case of a qualifying gain accruing to a company, a loss accruing to the company is not to be deductible from the gain ... .
- (3) In this section a “*pre-change asset*” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F).
- (4) In this section “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
- (5) For the purposes of this section it does not matter—
- (a) whether a qualifying gain accrues before, after or at the relevant time,
- (b) whether a qualifying gain accrues at a time when there are no losses which could be deducted (or could otherwise have been deducted) from the gain, or
- (c) whether the tax advantage is secured for the company to which a qualifying gain accrues or for any other company.
##### 184C
- (1) For the purposes of sections 184A and 184B, there is a qualifying change of ownership in relation to a company at any time if any one or more of the following occur at that time—
- (a) the company joins a group of companies (see subsections (2) to (5)),
- (b) the company ceases to be a member of a group of companies,
- (c) the company becomes subject to different control (see subsections (6) to (9)).
- (2) Whether a company is a member of a group of companies at any time is determined in accordance with section 170.
- (3) But, apart from in the excepted case, nothing in section 170(10) or (10A) is to prevent all the companies of one group from being regarded as joining another group when the principal company of the first group becomes a member of the other group at any time.
- (4) The excepted case is the case where—
- (a) the persons owning the shares of the principal company of the first group immediately before that time are the same as the persons owning the shares of the principal company of the other group immediately after that time,
- (b) the principal company of the other group was not the principal company of any group immediately before that time, and
- (c) immediately after that time the principal company of the other group had assets consisting entirely (or almost entirely) of shares of the principal company of the first group.
- (5) For this purpose, references to shares of a company are to the shares comprised in the issued share capital of the company.
- (6) The general rule is that a company becomes subject to different control at any time if any one or more of the following occur—
- (a) a person has control of the company at that time (whether alone or together with one or more others) and the person did not previously have control of the company,
- (b) a person has control of the company at that time together with one or more others and the person previously had control of the company alone,
- (c) a person ceases to have control of the company at that time (whether the person had control alone or together with one or more others).
- (7) The general rule is subject to the following exceptions.
- (8) A company does not become subject to different control in any case where it joins a group of companies and the case is the excepted case mentioned above.
- (9) A company (“the subsidiary”) does not become subject to different control at any time in any case where—
- (a) immediately before that time the subsidiary is the 75 per cent. subsidiary of another company, and
- (b) (although there is a change in the direct ownership of the subsidiary) that other company continues immediately after that time to own it as a 75 per cent. subsidiary.
##### 184D
For the purposes of sections 184A and 184B, “*tax advantage*” means—
- (a) relief or increased relief from corporation tax,
- (b) repayment or increased repayment of corporation tax,
- (c) the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax, or
- (d) the avoidance of a possible assessment to corporation tax.
##### 184E
- (1) If—
- (a) a company other than the relevant company makes a disposal of an asset, and
- (b) the asset has been disposed of at any time after the relevant time by a disposal to which section 171(1) does not apply (a “non-section 171(1) transfer”),
the asset ceases to be regarded as a pre-change asset for the purposes of sections 184A and 184B (but see also subsections (10) and (11)).
- (2) But (without affecting the generality of the provision made by the following subsection) if, on a non-section 171(1) transfer,—
- (a) an asset would cease to be regarded as a pre-change asset as a result of subsection (1), and
- (b) the company making the non-section 171(1) transfer retains any interest in or over the asset,
that interest is to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (3) If—
- (a) the relevant company or any other company holds an asset (“the new asset”) at or after the relevant time,
- (b) the value of the new asset derives in whole or in part from a pre-change asset, and
- (c) the new asset is not acquired by the company concerned as a result of a non-section 171(1) transfer,
the new asset is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (4) For this purpose the cases in which the value of an asset may be derived from any other asset include any case where—
- (a) assets have been merged or divided,
- (b) assets have changed their nature, or
- (c) rights or interests in or over assets have been created or extinguished.
- (5) If a pre-change asset is “*the old asset*” for the purposes of section 116 (reorganisations, conversions and reconstructions), “*the new asset*” for the purposes of that section is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (6) If a pre-change asset is the “*original shares*” for the purposes of sections 127 to 131 (reorganisation or reduction of share capital), the “*new holding*” for the purposes of those sections is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.
- (7) The following subsection applies if, as a result of the application of a relevant deferral provision in the case of a disposal of a pre-change asset (“the original disposal”),—
- (a) a gain or loss that would otherwise accrue to a company does not so accrue, or
- (b) any part of any such gain is treated as forming part of a single chargeable gain which does not accrue to the company on the original disposal,
and a gain or loss does, wholly or partly in consequence of the application of that provision in the case of the original disposal, accrue to the company or any other company on a subsequent occasion.
- (8) So much of the gain or loss accruing on the subsequent occasion as accrues in consequence of the application of the relevant deferral provision in the case of the original disposal is to be regarded for the purposes of sections 184A and 184B as accruing on a disposal of a pre-change asset (so far as it would not otherwise be so regarded).
- (9) A “*relevant deferral provision*” means any of the following—
- (a) section 139 (reconstruction involving transfer of business),
- (b) section 140 (postponement of charge on transfer of assets to non-resident company),
- (c) section 140A (transfer of a UK trade),
- (d) section 140E (merger leaving assets within UK tax charge),
- (e) sections 152 and 153 (replacement of business assets),
- (f) section 187 (postponement of charge on deemed disposal under section 185).
- (10) If—
- (a) a pre-change asset of the relevant company is transferred to another company (“*the transferee company*”),
- (b) any of sections 139, 140A and 140E apply to the companies in the case of the asset, and
- (c) the transfer of the asset is made directly or indirectly in consequence of, or otherwise in connection with, the arrangements mentioned in section 184A or 184B,
the asset is to be regarded as a “pre-change asset” in the hands of the transferee company for the purposes of sections 184A and 184B.
- (11) In such a case, subsection (1) applies as if the reference in paragraph (a) of that subsection to the relevant company were to the transferee company.
##### 184F
- (1) This section applies, in the case of any pre-change asset of the relevant company or any pre-change asset of any company which is acquired on a disposal to which section 171(1) applies, if—
- (a) the pre-change asset consists of a holding of securities which falls as a result of any provision of Chapter 1 of Part 4 to be regarded as a single asset (“the pre-change pooled asset”), and
- (b) as a result of any disposal or acquisition at any time after the relevant time, any securities (“the other securities”) would (but for this section) be regarded as forming part of the pre-change pooled asset.
- (2) None of the other securities are to be regarded for the purposes of this Act as forming part of the pre-change pooled asset.
- (3) But this does not prevent the other securities from being regarded, as a result of any provision of that Chapter, as forming part of or constituting a different, single asset (“the other pooled asset”).
- (4) Securities of the same class as the other securities which are disposed of at or after the relevant time—
- (a) are to be identified first with the other securities or securities forming part of the other pooled asset,
- (b) are to be identified next with securities forming part of the pre-change pooled asset (if the number of securities disposed of exceeds the number identified in accordance with paragraph (a)), and
- (c) subject to paragraphs (a) and (b), are to be identified in accordance with the provisions applicable apart from those paragraphs.
- (5) The above identification rules apply even if some or all of the securities disposed of are otherwise identified—
- (a) by the disposal, or
- (b) by a transfer or delivery giving effect to it;
but where a company disposes of securities in one capacity, they are not to be identified with securities which it holds, or can dispose of, only in some other capacity.
- (6) Chapter 1 of Part 4 has effect subject to this section.
- (7) In this section—
- “*pre-change asset*” means an asset which is pre-change asset for the purposes of section 184A or 184B,
- “*securities*” does not include relevant securities as defined in section 108 but, subject to that, means—shares or securities of a company, andany other assets where they are of a nature to be dealt in without identifying the particular assets disposed of or acquired.
- (8) For the purposes of this section, shares or securities of a company are not to be treated as being of the same class unless—
- (a) they are so treated by the practice of a recognised stock exchange, or
- (b) they would be so treated if dealt with on a recognised stock exchange.
##### 184G
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied.
- (2) Condition A is that—
- (a) any receipt arises to a company (“*the relevant company*”) on a disposal of an asset, and
- (b) the receipt arises directly or indirectly in consequence of, or otherwise in connection with, any arrangements.
- (3) Condition B is that—
- (a) a chargeable gain (the “relevant gain”) accrues to the relevant company on the disposal, and
- (b) losses accrue (or have accrued) to the relevant company on any other disposal of any asset (whether before or after or as part of the arrangements).
- (4) Condition C is that, but for the arrangements, an amount would have fallen to be taken into account wholly or partly instead of the receipt in calculating the income chargeable to corporation tax—
- (a) of the relevant company, or
- (b) of a company which, at any qualifying time, is a member of the same group as the relevant company.
- (5) Condition D is that—
- (a) the main purpose of the arrangements, or
- (b) one of the main purposes of the arrangements,
is to secure a tax advantage that involves the deduction of any of the losses from the relevant gain (whether or not it also involves anything else).
- (6) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the relevant company a notice in respect of the arrangements (but see also section 184I).
- (7) If, when the notice is given, conditions A to D are satisfied, no loss accruing to the relevant company at any time is to be deductible from the relevant gain.
- (8) A notice under this section must—
- (a) specify the arrangements,
- (b) specify the accounting period in which the relevant gain accrues, and
- (c) inform the relevant company of the effect of this section.
- (9) If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned.
- (a) an individual disposes of, or of an interest in, a dwelling-house or a part of a dwelling-house which is the individual’s only or main residence (“the initial disposal”),
- (b) the individual does so as a consequence of a change to the situation of the individual’s place of work or that of a co-owner of the dwelling-house or the interest, being a change that is required by the employer of the individual or the co-owner, and
- (c) the initial disposal is under a home purchase agreement.
- (2) If—
- (a) under the terms of the agreement the individual receives, within three years of the initial disposal, a share of any profit made by the purchaser upon the purchaser’s disposal of, or of an interest in, the dwelling-house or part of the dwelling-house, and
- (b) the receipt of that sum would be treated (apart from this section) as a disposal falling within section 22 (disposal where capital sums derived from assets),
that receipt shall be treated for the purposes of this Act as a gain attributable to the initial disposal but accruing to the individual at the time the sum is received.
- (3) In this section—
- “home purchase agreement” means an agreement—made with the employer or a person operating under an agreement with the employer (“the purchaser”),which includes a term entitling the individual to receive a share of any such profit as is mentioned in subsection (2)(a);
- “co-owner”, in relation to any individual (“A”), means another individual who holds an interest jointly or in common with A, whether or not the interests of the co-owners are equal.
##### 239ZA
- (1) Any gain accruing to trustees on the disposal of an asset comprised in the settled property of an employee trust shall not be a chargeable gain where the disposal is—
- (a) a disposal to a beneficiary, or
- (b) a deemed disposal under section 71(1),
if the conditions in subsection (2) are satisfied.
- (2) The conditions are that—
- (a) an amount that is equal to or exceeds the market value of the asset is chargeable to income tax as employment income within the meaning of section 7 of ITEPA 2003 (meaning of “employment income” etc);
- (b) neither the beneficiary nor (if different) the person who is liable for the income tax is an excluded person;
- (c) no actual consideration (as opposed to consideration deemed to be given by any enactment relating to the taxation of chargeable gains) is given directly or indirectly to the trustees for the asset; and
- (d) Schedule 7D does not to any extent prevent the gain being a chargeable gain.
- (3) The following are excluded persons—
- (a) a participator in a company, shares in or securities of which are comprised in the settled property;
- (b) a participator in a close company that has provided any property that has become comprised in the settled property;
- (c) a person who was a participator in a company within paragraph (a) or (b) at any time during the 10 years before the shares, securities or other property concerned became comprised in the settled property;
- (d) a person connected with a person within any of paragraphs (a) to (c).
- (4) For the purposes of subsection (3)—
- (a) “participator” has the same meaning as in section 239 and shall, in the case of a company which is not a close company, be construed as a person who would be a participator in the company if it were a close company, but
- (b) a person is not a participator unless either—
- (i) that person is entitled to, or entitled to rights enabling the acquisition of, 5% or more of the share capital of the company or any class of shares in the company, or
- (ii) that person would be entitled to 5% or more of the company’s assets on winding-up.
- (5) In determining whether a person is connected with another for the purposes of this section, section 286 shall apply as if subsection (8) of that section also mentioned uncle, aunt, nephew and niece.
- (6) In this section—
- “beneficiary” means a person within paragraph (a) or (b) of section 86(1) of the Inheritance Tax Act 1984 (trusts for benefit of employees);
- “close company” includes a company which, if resident in the United Kingdom, would be a close company as defined in section 288;
- “employee trust” means a settlement of property to which section 86 of the Inheritance Tax Act 1984 applies or would apply but for subsection (3) of that section;
- “market value” means the market value for the purposes of capital gains tax (as to which see section 272).
#### Recovery of tax from donee.
#### Transfer between settlements: identification of settlor
#### Trustees of settlements.
##### 103A
- (1) This Act applies in relation to a relevant offshore fund as if—
- (a) the fund were a company, and
- (b) the rights of the participants in the fund were shares in the company.
- (2) An offshore fund is a relevant offshore fund if—
- (a) it is not constituted by a company, and
- (b) it is not a unit trust scheme (see section 99).
- (3) In this section “offshore fund” and “*participant*”, in relation to a fund, have the meanings given in section 40A of the Finance Act 2008.
##### 171B
- (1) This section applies where an election is made under section 171A.
- (2) The effect of the election is that the chargeable gain or allowable loss, or such amount of it as is specified in the election, is treated as accruing not to company A but to company B.
- (3) The gain or loss treated as accruing to company B is to be taken to accrue at the time that, had the election not been made, it would have accrued to company A.
- (4) Where company B is not resident in the United Kingdom, the gain or loss treated as accruing to it is to be taken to accrue in respect of a chargeable asset held by it.
- (5) For this purpose an asset is a “*chargeable asset*” in relation to a company at any time if any gain accruing to the company on a disposal of the asset by the company at that time would be a chargeable gain and would by virtue of section 10B form part of its chargeable profits for corporation tax purposes.
- (6) Any payment made by company A to company B or by company B to company A, in pursuance of an agreement between them in connection with the election—
- (a) is not to be taken into account in computing profits or losses of either company for corporation tax purposes, and
- (b) is not for any purposes of the Corporation Tax Acts to be regarded as a distribution,
provided it does not exceed the amount of the chargeable gain or allowable loss that is treated, as a result of the election, as accruing to company B.
##### 171C
- (1) This section applies where —
- (a) an election is made under section 171A in relation to a gain or loss, and
- (b) company B is an insurance company.
- (2) For the purposes of section 171A(1)(c), section 440(3) of the Taxes Act (disposals of certain assets by and to insurance companies to fall outside the rule in section 171) is to be disregarded.
- (3) Subsection (2) does not apply if—
- (a) company A is an insurance company, and
- (b) the gain or loss arose in respect of the disposal of an asset that, immediately before the disposal, was part of that company's long-term insurance fund.
- (4) The chargeable gain or allowable loss treated as accruing to company B as a result of the election is to be treated as arising in respect of an asset that is not part of company B's long-term insurance fund.
- (5) In this section “*insurance company*” and “*long-term insurance fund*” have the same meaning as in Chapter 1 of Part 12 of the Taxes Act (see section 431(2) of that Act).
##### 195A
- (1) Sections 195B to 195E apply for the purposes of corporation tax on chargeable gains.
- (2) In those sections—
- “*licence-consideration swap*” means a case where conditions A, B, C and D are met;
- “*mixed-consideration swap*” means a case where conditions A, B, C and E are met.
- (3) Condition A is that a company (“company A”) disposes of one or more UK licences to another company (“company B”), by way of a bargain at arm's length (“disposal A”).
- (4) Condition B is that company B disposes of one or more UK licences to company A, by way of a bargain at arm's length (“disposal B”).
- (5) Condition C is that either or both of the following paragraphs applies—
- (a) the licence, or at least one of the licences, comprised in disposal A relates to a developed area;
- (b) the licence, or at least one of the licences, comprised in disposal B relates to a developed area.
- (6) Condition D is that both—
- (a) disposal A is the only consideration given for disposal B, and
- (b) disposal B is the only consideration given for disposal A.
- (7) Condition E is that either—
- (a) disposal A is the only consideration given for disposal B, or
- (b) disposal B is the only consideration given for disposal A,
(and accordingly one of the disposals is part of the consideration given for the other disposal).
- (8) In this section and sections 195B to 196 a reference to disposal of a UK licence includes—
- (a) a disposal of an interest in a UK licence, and
- (b) a disposal of a UK licence, or an interest in a UK licence, only so far as the licence relates to part of the licensed area.
##### 195B
- (1) This section applies to a licence-consideration swap.
- (2) Each company participating in the swap is to be treated as follows.
- (3) As regards the licence, or each licence, which the company disposes of, the company is to be treated as if it had disposed of that licence for a consideration of such amount as to secure that on the disposal neither a gain nor a loss accrues to the company.
- (4) In a case where the company acquires only one licence, the company is to be treated as if it had acquired the licence for a consideration of the same amount as the deemed disposal consideration.
- (5) In a case where the company acquires two or more licences, as regards each licence acquired, the company is to be treated as if it had acquired that licence for a consideration of—
$$DDC×ATA$where—DDC is the deemed disposal consideration,A is the value of the licence acquired, and TA is total value of all the licences acquired.$
- (6) In this section “*deemed disposal consideration*”, in relation to a company participating in the swap, means—
- (a) the amount of the consideration for which the company is, under subsection (3), treated as having disposed of its licence (if the company disposes of only one licence), or
- (b) the aggregate of all such amounts (if the company disposes of two or more licences).
##### 195C
- (1) This section applies to a mixed-consideration swap if—
- (a) the no gain/no loss loss amount (“N”) of the company that receives the mixed consideration (“company R”), exceeds
- (b) the amount of non-licence consideration (“C”) which company R receives.
- (2) In a case where company R acquires only one licence, company R is to be treated as if it had acquired the licence for a consideration of—
$N-C$
- (3) In a case where company R acquires two or more licences, as regards each licence acquired, company R is to be treated as if it had acquired the licence for a consideration of—
$$(N-C)×ATA$where—A is the value of the licence acquired, and TA is total value of all the licences acquired.$
- (4) The disposal by company R of a licence under the swap is to be taken to be one on which neither a gain nor a loss accrues.
- (5) But (despite subsection (4)), the disposal by company R is not a no gain/no loss disposal for the purposes of section 56.
- (6) For the purposes of the application of sections 53 and 54, any enactment is to be disregarded insofar as it provides that, if the other company which acquires a licence under the swap (“company G”) subsequently disposes of the licence, company R's acquisition of the licence is to be treated as company G's acquisition of it.
- (7) In this section the reference to the no gain/no loss amount of company R is a reference to—
- (a) in a case where company R disposes of only one licence, company R's no gain/no loss amount in relation to that disposal, or
- (b) in a case where company R disposes of two or more licences, the aggregate of company R's no gain/no loss amounts in relation to all of those disposals.
##### 195D
- (1) This section applies to a mixed-consideration swap if—
- (a) the no gain/no loss amount (“N”) of the company that receives the mixed consideration (“company R”) does not exceed
- (b) the amount of non-licence consideration (“C”) which company R receives.
- (2) As regards the licence, or each licence, which company R acquires, company R is to be treated as if it had acquired the licence for nil consideration.
- (3) In a case where company R disposes of only one licence, company R is to be treated as if, on the disposal of the licence, there had arisen a gain of—
$C-N$
- (4) In a case where company R disposes of two or more licences, as regards each licence disposed of, company R is to be treated as if, on the disposal of the licence, there had arisen a gain of—
$$(C-N)×DTD$where—D is the value of the licence disposed of, and TD is total value of all the licences disposed of.$
##### 195E
- (1) This section applies to a mixed-consideration swap—
- (a) whatever the no gain/no loss amount (“N”) of the company that gives the mixed consideration (“company G”), and
- (b) whatever the amount of the non-licence consideration (“C”) which company G gives.
- (2) In a case where company G acquires only one licence, company G is to be treated as if it had acquired the licence for a consideration of—
$N+C$
- (3) In a case where company G acquires two or more licences, as regards each licence acquired, company G is to be treated as if it had acquired the licence for a consideration of—
$$(N+C)×ATA$where—A is the value of the licence acquired, and TA is total value of all the licences acquired.$
- (4) The disposal by company G of a licence under the swap is to be taken to be one on which neither a gain nor a loss accrues.
- (5) But (despite subsection (4)), the disposal by company G is not a no gain/no loss disposal for the purposes of section 56.
- (6) For the purposes of the application of sections 53 and 54, any enactment is to be disregarded insofar as it provides that, if the other company which acquires a licence under the swap (“company R”) subsequently disposes of the licence, company G's acquisition of the licence is to be treated as company R's acquisition of it.
- (7) In this section the reference to the no gain/no loss amount of company G is a reference to—
- (a) in a case where company G disposes of only one licence, company G's no gain/no loss amount in relation to that disposal, or
- (b) in a case where company G disposes of two or more licences, the aggregate of company G's no gain/no loss amounts in relation to all of those disposals.
##### 198A
- (1) This section applies if a person (“P”) makes a disposal and acquisition which—
- (a) is a ring fence reinvestment, and
- (b) qualifies for roll-over relief.
- (2) P may make a claim under this section in relation to the disposal and acquisition.
- (3) If P makes a claim under this section—
- (a) section 152 does not apply to any of the disposal consideration, and
- (b) any gain accruing to P on the disposal is not a chargeable gain.
- (4) In this section “*disposal consideration*” means the whole of the consideration obtained on the disposal made by P.
##### 198B
- (1) This section applies if a person (“P”) makes a disposal and acquisition which—
- (a) is a ring fence reinvestment, and
- (b) qualifies for section 153 relief.
- (2) P may make a claim under this section in relation to the disposal and acquisition.
- (3) If P makes a claim under this section—
- (a) section 153(1)(a) applies in relation to P and the disposal, but
- (b) section 153(1)(b) does not apply to P and the acquisition.
##### 198C
- (1) This section applies where a person (“P”) carrying on a ring fence trade who for a consideration disposes of, or of an interest in, any assets (“the old assets”) declares, in P's return for the chargeable period in which the disposal takes place—
- (a) that the whole or any specified part of the consideration will be applied in the acquisition of, or of an interest in, other assets (“the new assets”),
- (b) that the acquisition will take place as mentioned in section 152(3),
- (c) that the disposal and acquisition will be a ring fence reinvestment,
- (d) that P intends to make a claim under section 198A or 198B in relation to the disposal and acquisition, and
- (e) that P has not made, and will not make, a declaration under section 153A in relation to the disposal and acquisition.
- (2) Until the declaration ceases to have effect, section 198A or 198B applies as if the acquisition had taken place and the person had made a claim under that section.
- (3) The declaration ceases to have effect as follows—
- (a) if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim made under section 198A or 198B, on the day on which it is so withdrawn or superseded, and
- (b) if and to the extent that it is not so withdrawn or superseded, on the relevant day.
- (4) On the declaration ceasing to have effect in whole or in part, all necessary adjustments—
- (a) are to be made by making or amending assessments or by repayment or discharge of tax, and
- (b) are to be so made despite any limitation on the time within which assessments or amendments may be made.
- (5) If—
- (a) P makes a declaration under this section, and
- (b) the disposal and acquisition is not a ring fence reinvestment, but qualifies for roll-over relief or section 153 relief,
on P making a claim, the declaration is to have effect as also a declaration under section 153A.
- (6) In this section “*the relevant day*” means—
- (a) in relation to capital gains tax, the third anniversary of the 31st January next following the year of assessment in which the disposal of, or of the interest in, the old assets took place, and
- (b) in relation to corporation tax, the fourth anniversary of the last day of the accounting period in which that disposal took place.
- (7) Section 152(6), (10) and (11) apply for the purposes of this section as they apply for the purposes of section 152.
##### 198D
- (1) If P makes a claim under section 198A or 198B, no other relevant claim may be made in respect of the relevant acquisition.
- (2) P may make a claim under section 198A or 198B (“the new claim”), if P has previously made a claim under section 152 or 153 (“the previous claim”) in respect of the relevant acquisition.
- (3) But P may make the new claim only if the previous claim is withdrawn at or before the time the new claim is made.
- (4) If the new claim is made in accordance with subsections (2) and (3), all necessary adjustments—
- (a) are to be made by making or amending assessments or by repayment or discharge of tax, and
- (b) are to be so made despite any limitation on the time within which assessments or amendments may be made.
- (5) In this section—
- “*relevant acquisition*” means the acquisition of the new assets that is comprised in the disposal and acquisition to which a claim under section 198A or 198B or declaration under section 198C relates;
- “*relevant claim*” means a claim under section 152, 153, 198A or 198B.
##### 198E
- (1) This section applies for the purposes of sections 198A to 198G.
- (2) A disposal and acquisition is a ring fence reinvestment if—
- (a) the disposal was—
- (i) a material disposal, or
- (ii) a disposal of a UK licence which relates to an undeveloped area,
- (b) the old assets were used only for the purposes of P's ring fence trade,
- (c) the new assets are taken into use, and used only, for the purposes of one or more of the following trades—
- (i) P's ring fence trade;
- (ii) if P is a member of a group of companies (within the meaning given in section 170), a ring fence trade of another member of that group, and
- (d) the new assets are oil assets.
- (3) If the disposal consists of—
- (a) disposal of a licence to which section 195D(3) applies, or
- (b) disposal of two or more licences to which section 195D(4) applies,
the consideration for the disposal is to be taken to be the whole of the non-licence consideration obtained on the disposal (which is referred to as “*C*” in section 195D).
- (4) Accordingly, in sections 198A to 198G (including section 198A(4)), any reference to the consideration obtained on the disposal has effect subject to subsection (3).
- (5) Each of the following is an “*oil asset*” for the purposes of this section—
- (a) an interest in oil to be won from an oil field,
- (b) an asset used in connection with an oil field,
- (c) a structure which is to be placed on the seabed of the United Kingdom continental shelf,
- (d) an asset used wholly in the winning of oil, or in the measuring of oil won, in the United Kingdom otherwise than from an oil field,
- (e) an asset used for the initial treatment or storage of oil in the United Kingdom,
- (f) an asset used for the transportation of oil from an oil field to the United Kingdom, and
- (g) a UK licence which relates to an undeveloped area.
- (6) Section 12 of the Oil Taxation Act 1975 (interpretation of Part 1 of that Act) applies for the interpretation of subsection (5)(a) to (f).
- (7) Expressions used in this section and in section 152 have the same meanings in this section as in section 152.
- (8) In this section a reference to a UK licence which relates to an undeveloped area has the same meaning as in section 194 (see section 196).
- (9) In this section—
- “*material disposal*” has the meaning given in section 197;
- “*ring fence trade*” has the meaning given in section 198.
##### 198F
- (1) This section applies for the purposes of sections 198A and 198B and section 198G.
- (2) A disposal and acquisition qualifies for roll-over relief if—
- (a) the consideration for the disposal is applied in an acquisition as mentioned in section 152(1), and
- (b) section 152(1)(a) and (b) would apply to the disposal and acquisition if the appropriate claim were made.
- (3) Subsections (4) to (6) apply in deciding whether a disposal and acquisition is one that qualifies for roll-over relief.
- (4) Section 152(8) is to be disregarded.
- (5) Section 198A is to be disregarded.
- (6) Subject to subsections (4) to (5), all the circumstances are to be taken into account, including section 153(1) and section 198(1) and (2).
##### 198G
- (1) This section applies for the purposes of sections 198B and 198C.
- (2) A disposal and acquisition qualifies for section 153 relief if—
- (a) section 153(1) applies to part of the amount or value of the consideration for the disposal,
- (b) section 153(1)(a) and (b) would apply to the disposal and acquisition if the appropriate claim were made, and
- (c) the disposal and acquisition would qualify for roll-over relief but for the disapplication of section 152(1) by section 153(1).
- (3) Subsections (4) to (6) apply in deciding whether a disposal and acquisition is one that qualifies for section 153 relief.
- (4) Section 153(2) has effect subject to section 198F(4) and (5).
- (5) Section 198B is to be disregarded.
- (6) Subject to subsections (4) and (5), all the circumstances are to be taken into account, including section 198(1).
##### 263CA
- (1) This section applies where, in the case of any stock lending arrangement—
- (a) the borrower (B) becomes insolvent after the lender (L) has transferred the securities,
- (b) as a result of the insolvency, the requirement for B to make a transfer back to L will not be complied with as regards some or all of the securities,
- (c) collateral is used (whether directly or indirectly) to enable L to acquire securities (“replacement securities”) of the same description as the securities which will not be transferred back, and
- (d) the replacement securities are acquired before the end of the period of 30 days beginning with the day on which B becomes insolvent (“the insolvency date”).
- (2) In accordance with section 263B(2), the transfer of the securities under the arrangement is not to be regarded as a disposal by L for the purposes of this Act (but this is subject to subsection (5)).
- (3) B is to be treated for the purposes of this Act as having acquired the securities which will not be transferred back to L; and that acquisition is to be treated—
- (a) as being made on the insolvency date, and
- (b) as being for a consideration equal to their market value on that date.
- (4) The acquisition of the replacement securities is to be treated, as regards L, as if it were a transfer back of securities in accordance with the arrangement (so that, in accordance with section 263B(2), that acquisition is not regarded as an acquisition by L for the purposes of this Act).
- (5) If the number of replacement securities is less than the number of securities which B is treated as having acquired, L is to be treated for the purposes of this Act as having made a disposal, at the insolvency date, of the difference (“the deemed disposal”).
- (6) The consideration for the deemed disposal is—
- (a) where all the collateral is used to enable L to acquire replacement securities, nil, and
- (b) where not all the collateral is so used, the difference between—
- (i) the market value (at the insolvency date) of the number of securities which could have been acquired using the collateral, and
- (ii) the market value (at that date) of the number of securities which were in fact so acquired.
- (7) But if L at any time receives any amount (whether arising out of B's insolvency or otherwise) in respect of B's liability to L in respect of the securities which are treated under subsection (5) as having been disposed of by L that amount is to be treated as a chargeable gain accruing at that time to L.
- (8) The liability mentioned in subsection (7) is not to be treated as giving rise to a relevant non-lending relationship for the purposes of Part 6 of CTA 2009 (relationships treated as loan relationships etc).
- (9) For the purposes of this section, B becomes insolvent—
- (a) if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,
- (b) if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,
- (c) on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,
- (d) if an individual voluntary arrangement takes effect under Part 8 of that Act,
- (e) on the presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),
- (f) if a compromise or arrangement takes effect under Part 26 of the Companies Act 2006,
- (g) if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,
- (h) if a bank administration order takes effect under Part 3 of that Act, or
- (i) on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.
- (10) In this section—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
- “*group*”, in relation to companies, means a group determined in accordance with section 170,
- “*qualifying time*”, in relation to any arrangements, means any time which falls in the period—beginning with the time at which the arrangements are made, andending with the time at which the matters (other than any tax advantage) intended to be secured by the arrangements are secured,
- “*tax advantage*” has the meaning given by section 184D.
##### 184H
- (1) This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied.
- (2) Condition A is that—
- (a) a chargeable gain (the “relevant gain”) accrues to a company (“*the relevant company*”) directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
- (b) losses accrue (or have accrued) to the relevant company on any disposal of any asset (whether before or after or as part of the arrangements).
- (3) Condition B is that the relevant company, or a company connected with the relevant company, incurs any expenditure—
- (a) which is allowable as a deduction in calculating its total profits chargeable to corporation tax but which is not allowable as a deduction in computing its gains under section 38, and
- (b) which is incurred directly or indirectly in consequence of, or otherwise in connection with, the arrangements.
- (4) Condition C is that the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage that involves both—
- (a) the deduction of the expenditure in calculating total profits, and
- (b) the deduction of any of the losses from the relevant gain,
whether or not it also involves anything else.
- (5) Condition D is that the arrangements are not excluded arrangements. For this purpose arrangements are excluded arrangements if—
- (a) the arrangements are made in respect of land or any estate or interest in land,
- (b) the arrangements fall within section 779(1) or (2) of the Taxes Act (sale and lease-back: limitation on tax reliefs),
- (c) the person to whom the payment mentioned in that subsection is payable is not a company connected with the relevant company, and
- (d) the arrangements are made between persons dealing at arm's length.
- (6) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the company a notice in respect of the arrangements (but see also section 184I).
- (7) If, when the notice is given, conditions A to D are satisfied, no loss accruing to the company at any time is to be deductible from the relevant gain.
- (8) A notice under this section must—
- (a) specify the arrangements,
- (b) specify the accounting period in which the relevant gain accrues, and
- (c) inform the relevant company of the effect of this section.
- (9) If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned.
- (10) In this section—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
- “*tax advantage*” has the meaning given by section 184D.
- (11) For the purposes of this section it does not matter whether the tax advantage is secured for the relevant company or for any other company.
##### 184I
- (1) Subsection (2) applies if—
- (a) the Board give a notice under section 184G or 184H (a “relevant notice”) to a company that specifies an accounting period, and
- (b) the notice is given before the company has made its company tax return for that accounting period.
- (2) If the company makes its return for that period before the end of the applicable 90 day period (see subsection (12)), it may—
- (a) make a return that disregards the notice, and
- (b) at any time after making the return and before the end of the applicable 90 day period, amend the return for the purpose of complying with the provision referred to in the notice.
- (3) If a company has made a company tax return for an accounting period, the Board may give the company a relevant notice in relation to that period only if a notice of enquiry has been given to the company in respect of its return for that period.
- (4) After any enquiries into the return for that period have been completed, the Board may give the company a relevant notice only if requirements A and B are met.
- (5) Requirement A is that at the time the enquiries into the return were completed, the Board could not have been reasonably expected, on the basis of information made available—
- (a) to them before that time, or
- (b) to an officer of theirs before that time,
to have been aware that the circumstances were such that a relevant notice could have been given to the company in relation to that period.
- (6) For the purposes of requirement A, paragraph 44(2) and (3) of Schedule 18 to the Finance Act 1998 (information made available) applies as it applies for the purposes of paragraph 44(1).
- (7) Requirement B is that—
- (a) the company or any other person was requested to produce or provide information during an enquiry into the return for that period, and
- (b) if the request had been duly complied with, the Board could reasonably have been expected to give the company a relevant notice in relation to that period.
- (8) If—
- (a) a company makes a company tax return for an accounting period, and
- (b) the company is subsequently given a relevant notice that specifies that period,
it may amend the return for the purpose of complying with the provision referred to in the notice at any time before the end of the applicable 90 day period.
- (9) If the relevant notice is given to the company after it has been given a notice of enquiry in respect of its return for the period, no closure notice may be given in relation to its company tax return until—
- (a) the end of the applicable 90 day period, or
- (b) the earlier amendment of its company tax return for the purpose of complying with the provision referred to in the notice.
- (10) If the relevant notice is given to the company after any enquiries into the return for the period are completed, no discovery assessment may be made as regards the chargeable gain to which the notice relates until—
- (a) the end of the applicable 90 day period, or
- (b) the earlier amendment of the company tax return for the purpose of complying with the provision referred to in the notice.
- (11) Subsections (2)(b) and (8) do not prevent a company tax return for a period becoming incorrect if—
- (a) a relevant notice is given to the company in relation to that period,
- (b) the return is not amended in accordance with subsection (2)(b) or (8) for the purpose of complying with the provision referred to in the notice, and
- (c) the return ought to have been so amended.
- (12) In this section—
- “*the applicable 90 day period*”, in relation to a relevant notice, means the period of 90 days beginning with the day on which the notice is given,
- “*closure notice*” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998,
- “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of that Schedule, as read with paragraph 4 of that Schedule,
- “*discovery assessment*” means an assessment under paragraph 41 of that Schedule,
- “*notice of enquiry*” means a notice under paragraph 24 of that Schedule.
#### Relief on re-investment for individuals.
#### Company that gives mixed consideration
##### 263E
- (1) This section applies if—
- (a) section 774B of the Taxes Act (disregard of intended effects of arrangement involving disposals of assets) applies in relation to a structured finance arrangement,
- (b) the borrower or a person connected with the borrower makes a disposal of any security at any time under the arrangement to or for the benefit of the lender or a person connected with the lender, and
- (c) condition A or B is met.
- (2) Condition A is that the person making the disposal (and no-one else) has the right or obligation under the arrangement to acquire the asset disposed of by that disposal at any subsequent time (whether or not the right or obligation is subject to any conditions).
- (3) Condition B is that—
- (a) the asset disposed of by that disposal will subsequently cease to exist at any time, and
- (b) it is intended that that asset will be held by the lender, or a person connected with the lender, from the time of the disposal until that time.
- (4) The disposal of the security by the borrower or a person connected with the borrower is to be disregarded for the purposes of this Act.
- (4A) If, at any time after that disposal, it becomes apparent that—
- (a) the person making the disposal will not subsequently acquire under the arrangement the asset disposed of by that disposal, or
- (b) that asset will not be held as mentioned in subsection (3)(b),
that person is to be treated for the purposes of this Act as disposing of that asset at that time for a consideration equal to its market value at that time.
- (5) Except in a case falling within subsection (4A), any subsequent acquisition by the person making the disposal of the asset disposed of by that disposal is to be disregarded for the purposes of this Act.
- (6) In this section—
- “*the borrower*”, in relation to a structured finance arrangement, means the person who is the borrower under the arrangement for the purposes of section 774A of the Taxes Act,
- “*the lender*”, in relation to a structured finance arrangement, means the person who is the lender under the arrangement for the purposes of that section,
- “*security*” means any such asset as is mentioned in subsection (2)(c) and (d) of that section.
- (7) For the purposes of this section—
- (a) references to a person connected with the borrower do not include the lender, and
- (b) references to a person connected with the lender do not include the borrower.
##### 268A
- (1) A gain accruing on a disposal is not a chargeable gain if it accrues on—
- (a) a disposal of the right to receive the whole or any part of a qualifying payment in respect of National-Socialist persecution, or
- (b) a disposal of an interest in any such right.
- (2) A payment is a qualifying payment in respect of National-Socialist persecution if it is payable as mentioned in paragraphs (a) to (c) of section 756A(1) of ITTOIA 2005 (income tax exemption for payments to or in respect of victims of National-Socialist persecution).
- (3) In this section “*interest*”, in relation to any right, means an interest as a co-owner of the right.
- (4) It does not matter—
- (a) whether the right is owned jointly or in common, or
- (b) whether or not the interests of the co-owners are equal.
#### Replacement of business assets used in connection with oil fields.
#### Disposals by Northern Ireland housing associations.
#### Chargeable events when bonds owned.
#### Effect of election under section 279A
#### Elections under section 279A
##### A1
- (1) In determining the exempt amount available to the trustees of a settlement in relation to a year of assessment—
- (a) a principal settlement and its sub-fund settlements shall be treated, for the purposes of paragraphs 1 and 2 below, as if no sub-fund elections had been made, and
- (b) paragraph 3 below shall apply for the purposes of determining the exempt amount available to each member of the class consisting of a principal settlement and its sub-fund settlements.
- (2) The reference in sub-paragraph (1) above to a principal settlement and its sub-fund settlements means a principal settlement in respect of which one or more sub-fund elections are treated as having taken effect.
##### 3
- (1) The exempt amount available in relation to a year of assessment to the trustees of each settlement in the class consisting of a principal settlement and its sub-fund settlements shall be the exempt amount available to the trustees of the principal settlement in relation to the year, determined in accordance with paragraph 1 or 2 above as if no sub-fund elections had been made.
- (2) But if there are two or more non-excluded settlements in the class consisting of a principal settlement and its sub-fund settlements, the exempt amount available to the trustees of each settlement in the class in relation to the year shall be the amount specified in sub-paragraph (1) above divided by the number of non-excluded settlements in the class.
- (3) In this paragraph—
- “*excluded settlement*” has the meaning given by paragraph 2(7) above, and
- references to a settlement having sub-fund settlements, and similar expressions, are references to a settlement being the principal settlement in respect of which one or more sub-fund elections are treated as having taken effect.
## SCHEDULE 4ZA
### Making a sub-fund election
##### 1
The trustees of a settlement (the “principal settlement”) may elect that a fund or other specified portion of the settled property (the “sub-fund”) be treated, unless the context otherwise requires, as a separate settlement (the “sub-fund settlement”) for the purposes of this Act, and the election shall have effect.
##### 2
- (1) An election under paragraph 1 (a “sub-fund election”) must specify the date on which it is to be treated as having taken effect, which must not be later than the date on which it is made.
- (2) The election shall be treated as having taken effect—
- (a) at the beginning of the specified date, or
- (b) if there is a deemed disposal of an asset by the trustees of the principal settlement under section 71(1) (by virtue of paragraph 19) or section 80(2) (by virtue of paragraph 18(2)), on the specified date immediately after the deemed disposal.
##### 3
Trustees may make a sub-fund election only if—
- (a) Conditions 1 to 4 are satisfied when the election is made, and
- (b) Conditions 2 to 4 were satisfied throughout the period beginning with the time when the election is to be treated as having taken effect and ending immediately before the election is made.
##### 4
Condition 1 is that the principal settlement is not itself a sub-fund settlement.
##### 5
Condition 2 is that the sub-fund is not the whole of the property comprised in the principal settlement.
##### 6
Condition 3 is that, if the sub-fund election had taken effect, the sub-fund settlement would not consist of or include an interest in an asset any other interest in which would be comprised in the principal settlement.
##### 7
For the purpose of Condition 3—
- (a) section 104(1) shall not have effect, and
- (b) “*interest*”, in relation to any asset, means an interest as a co-owner of the asset (whether the asset is owned jointly or in common and whether or not the interests of the co-owners are equal).
##### 8
Condition 4 is that, if the sub-fund election had taken effect, no person would be a beneficiary under both the sub-fund settlement and the principal settlement.
##### 9
- (1) For the purpose of Condition 4 a person is a beneficiary under a settlement—
- (a) if—
- (i) any property which is or may at any time be comprised in the settlement, or
- (ii) any derived property,
is, or will or may become, payable to him or applicable for his benefit in any circumstances whatsoever, or
- (b) if he enjoys a benefit deriving directly or indirectly from—
- (i) any property which is comprised in the settlement, or
- (ii) any derived property.
- (2) But for the purpose of Condition 4 a person is not to be regarded as a beneficiary under a settlement if property comprised in the settlement, or any derived property, will or may become payable to him or applicable for his benefit by reason only of—
- (a) his marrying, or entering into a civil partnership with, a beneficiary under the settlement,
- (b) the death of a beneficiary under the settlement,
- (c) the exercise by the trustees of the settlement of—
- (i) a power conferred by section 32 of the Trustee Act 1925 (c. 19) or section 33 of the Trustee Act (Northern Ireland) 1958 (c. 23 (N.I.)) (powers of advancement),
- (ii) a power conferred by the law of a jurisdiction other than England and Wales or Northern Ireland which makes provision similar to the provisions specified in sub-paragraph (i), or
- (iii) a power of advancement which is conferred by the instrument creating the principal settlement, or by another instrument made in accordance with the terms of the principal settlement, and which is subject to the same restrictions as those specified in section 32(1)(a) and (c) of the Trustee Act 1925, or
- (d) the failure or determination of trusts of the kind described in section 33 of the Trustee Act 1925 (protective trusts).
- (3) In this paragraph “*derived property*”, in relation to any property, means—
- (a) income from that property,
- (b) property directly or indirectly representing—
- (i) proceeds of that property, or
- (ii) proceeds of income from that property, or
- (c) income from property which is derived property by virtue of paragraph (b).
### Sub-fund elections: procedure
##### 10
A sub-fund election must be made—
- (a) by notice to an officer of Revenue and Customs, and
- (b) in such form as the Commissioners for Her Majesty's Revenue and Customs may require.
##### 11
A sub-fund election may not be made after the second 31st January after the year of assessment in which the date on which the election is to be treated as having taken effect falls.
##### 12
A sub-fund election must contain—
- (a) a declaration by each trustee of the principal settlement that he consents to the election,
- (b) a statement by the trustees of the principal settlement that the requirement in paragraph 3 is satisfied,
- (c) such information as the Commissioners for Her Majesty's Revenue and Customs may require in relation to the principal settlement (which may, in particular, include information relating to the trustees, the trusts, property which is or has been comprised in the settlement, the settlors or the beneficiaries),
- (d) a declaration by the trustees of the principal settlement that the information given in the election is correct, to the best of their knowledge and belief, and
- (e) such other declarations as the Commissioners for Her Majesty's Revenue and Customs may require.
##### 13
A sub-fund election may not be revoked.
### Power to make enquiries
##### 14
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 15
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 16
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Consequences of a sub-fund election
##### 17
The sub-fund settlement shall be treated, for the purposes of this Act, as having been created at the time when the sub-fund election is treated as having taken effect.
##### 18
- (1) Each trustee of the trusts on which the property comprised in the sub-fund settlement is held shall be treated as a trustee of the sub-fund settlement for the purposes of this Act.
- (2) A person who is a trustee of the sub-fund settlement shall be treated for the purposes of this Act, from the time when the election is treated as having taken effect, as having ceased to be a trustee of the principal settlement unless he is also a trustee of trusts on which property comprised in the principal settlement is held.
- (3) A person who is a trustee of the principal settlement shall not be treated for the purposes of this Act as a trustee of the sub-fund settlement unless he is also a trustee of trusts on which property comprised in the sub-fund settlement is held.
##### 19
The trustees of the sub-fund settlement shall be treated for the purposes of this Act as having become absolutely entitled, at the time when the sub-fund election is treated as having taken effect, to the property comprised in that settlement as against the trustees of the principal settlement.
##### 20
- (1) A deemed disposal by the trustees of the principal settlement of an asset under section 71(1) (by virtue of paragraph 19) or section 80(2) (by virtue of paragraph 18(2)) shall be treated as having been made at the beginning of the date on which the sub-fund election is treated as having taken effect.
- (2) If the trustees of the sub-fund settlement have acquired an asset of which the trustees of the principal settlement are deemed to have disposed under section 71(1) (by virtue of paragraph 19), they shall be deemed to have acquired it at the time when the election is treated as having taken effect.
- (3) The trustees of the principal settlement shall not be treated as having disposed of an asset under section 80(2) by virtue of paragraph 18(2) if they are treated as having disposed of the same asset under section 71(1) by virtue of paragraph 19.
##### 21
If the trustees of the sub-fund settlement are treated by virtue of paragraph 19 as having become absolutely entitled to money expressed in sterling, for the purposes of this Act—
- (a) the trustees of the principal settlement shall be treated as having disposed of the money at the beginning of the day on which the sub-fund election is treated as having taken effect, and
- (b) the trustees of the sub-fund settlement shall be treated as having acquired the money at the time when the election is treated as having taken effect.
##### 22
- (1) If the trustees of the principal settlement are deemed to have disposed of an asset under section 71(1) (by virtue of paragraph 19), the trustees of the principal settlement shall be treated for the purposes of sections 90 and 94 as having transferred the asset to the trustees of the sub-fund settlement.
- (2) Sub-paragraph (1) also applies where the trustees of the principal settlement would be deemed to have disposed of money expressed in sterling under subsection (1) of section 71 if in that subsection—
- (a) the reference to “assets” were a reference to “property”, and
- (b) for “their” there were substituted “ its ”.
### Share loss relief
##### 125A
- (1) If loss relief under section 573 of the Taxes Act or Chapter 6 of Part 4 of ITA 2007 (“share loss relief”) is obtained in respect of a loss or any part of a loss, no deduction is to be made in respect of the loss or (as the case may be) the part under this Act.
- (2) If a claim is made for share loss relief in respect of a loss accruing on the disposal of shares, section 30 has effect in relation to the disposal as if for the references in subsections (1)(b) and (5) to a tax-free benefit there were substituted references to any benefit whether tax-free or not.
- (3) All such adjustments of corporation tax on chargeable gains or capital gains tax are to be made, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of—
- (a) share loss relief being obtained in respect of an allowable loss, or
- (b) such relief not being obtained in respect of the whole or part of such a loss in respect of which a claim is made.
##### 151BA
- (1) This section applies for the purpose of identifying the securities or shares disposed of in any case where—
- (a) an individual or company (“the investor”) disposes of part of a holding of securities or shares (“the holding”), and
- (b) the holding includes securities or shares to which CITR is attributable in respect of one or more years of assessment or accounting periods that have been held by the investor continuously from the time they were issued until the disposal.
- (2) Any disposal by the investor of securities or shares included in the holding which have been acquired by the investor on different days is treated as relating to those acquired on an earlier day rather than to those acquired on a later day.
- (3) If there is a disposal by the investor of securities or shares included in the holding which have been acquired by the investor on the same day, any of those securities or shares—
- (a) to which CITR is attributable, and
- (b) which have been held by the investor continuously from the time they were issued until the time of disposal,
are treated as disposed of after any other securities or shares included in the holding which were acquired by the investor on that day.
- (4) For the purposes of this section a holding of securities is any number of securities of a company which—
- (a) carry the same rights,
- (b) were issued under the same terms, and
- (c) are held by the investor in the same capacity.
It does not matter for this purpose that the number of the securities grows or diminishes as securities carrying those rights and issued under those terms are acquired or disposed of.
- (5) For the purposes of this section a holding of shares is any number of shares in a company which—
- (a) are of the same class, and
- (b) are held by the investor in the same capacity.
It does not matter for this purpose that the number of the shares grows or diminishes as shares of that class are acquired or disposed of.
- (6) Chapter 1 of Part 4 (share pooling, etc) has effect subject to this section.
- (7) Sections 104 to 107 (which make provision for the identification of securities and shares on a disposal) do not apply to securities or shares to which CITR is attributable.
- (8) In a case to which section 127 (equation of original shares and new holding) applies, shares included in the new holding are treated for the purposes of subsections (2) and (3) as acquired when the original shares were acquired.
- (9) In subsection (8)—
- (a) the reference to section 127 includes a reference to that section as it is applied by virtue of any enactment relating to chargeable gains, and
- (b) “*original shares*” and “*new holding*” have the same meaning as in section 127, or (as the case may be) that section as applied by virtue of the enactment in question.
- (10) In this section and sections 151BB and 151BC—
- (a) if the investor is an individual—
- (i) “*CITR*” has the meaning given by section 333 of ITA 2007,
- (ii) references to CITR being attributable to securities, shares or debentures are to be read in accordance with section 357 of that Act, and
- (iii) references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with section 380 of that Act,
- (b) if the investor is a company—
- (i) “*CITR*” means relief under Part 5 of Schedule 16 to the Finance Act 2002,
- (ii) references to CITR being so attributable are to be read in accordance with paragraph 26 of that Schedule, and
- (iii) references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with paragraph 49 of that Schedule.
##### 151BB
- (1) If—
- (a) an individual or company (“the investor”) holds shares in the CDFI which are of the same class and held in the same capacity (“the existing holding”),
- (b) there is a reorganisation affecting the existing holding as a result of an allotment which—
- (i) falls within section 126(2)(a) (an allotment of shares or debentures in respect of and in proportion to an original holding), and
- (ii) is not an allotment of corresponding bonus shares,
- (c) immediately after the reorganisation, CITR is attributable to the shares included in the existing holding or the shares or debentures allotted in respect of those shares, in respect of one or more years of assessment or accounting periods, and
- (d) if CITR is attributable to the shares included in the existing holding at that time, those shares have been held by the investor continuously from the time they were issued until the reorganisation,
sections 127 to 130 (treatment of share capital following a reorganisation) do not apply in relation to the existing holding.
- (2) Section 116(10) (reorganisations, conversions and reconstructions) does not apply in any case where the old asset consists of shares held (in the same capacity) by the investor—
- (a) that have been held by the investor continuously from the time they were issued until the relevant transaction, and
- (b) to which CITR is attributable immediately before that transaction.
In this subsection “old asset” and “the relevant transaction” have the meaning given by section 116.
- (3) For the purposes of subsection (1)—
- “*corresponding bonus shares*” means bonus shares that—are issued in respect of shares included in the existing holding, andare in the same company, are of the same class, and carry the same rights as, those shares,
- “*reorganisation*” has the meaning given in section 126.
- (4) The following provisions of this Act have effect subject to this section—
- section 116 (reorganisations, conversions and reconstructions);
- Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).
- (5) In this section “the CDFI” is to be read—
- (a) if the investor is an individual, in accordance with section 334(2) of ITA 2007,
- (b) if the investor is a company, in accordance with paragraph 1(2) of Schedule 16 to the Finance Act 2002.
##### 151BC
- (1) If—
- (a) an individual or company (“the investor”) holds shares in or debentures of a company (“company A”),
- (b) there is a reconstruction or amalgamation affecting that holding (“the existing holding”),
- (c) immediately before the reconstruction or amalgamation, CITR is attributable to the shares or debentures included in the existing holding in respect of one or more years of assessment or accounting periods, and
- (d) the shares or debentures included in the existing holding have been held by the investor continuously from the time they were issued until the reconstruction or amalgamation,
sections 135 and 136 (share exchanges and company reconstructions) do not apply in respect of the existing holding.
- (2) Subsection (1)(a) applies only if the shares or debentures are held by the investor in the same capacity.
- (3) For the purposes of subsection (1) a “*reconstruction or amalgamation*” means an issue by a company of shares in or debentures of that company in exchange for or in respect of shares in or debentures of company A.
- (4) The following provisions of this Act have effect subject to this section—
- section 116 (reorganisations, conversions and reconstructions),
- Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).
- (5) The investor is treated as disposing of any securities or shares which but for subsection (1) the investor—
- (a) would be treated as exchanging for other securities or shares by virtue of section 136, or
- (b) would be so treated but for section 137(1) (which restricts section 136 to genuine reconstructions).
##### 256A
- (1) This section applies if a charitable trust has a non-exempt amount under section 540 of ITA 2007 for a year of assessment.
- (2) Attributable gains of the charitable trust for the year of assessment may be attributed to the non-exempt amount but only so far as the non-exempt amount has not been used up.
- (3) The non-exempt amount can be used up (in whole or in part) by—
- (a) attributable gains being attributed to it under this section, or
- (b) attributable income being attributed to it under section 541 of ITA 2007.
- (4) The whole of the non-exempt amount must be used up by—
- (a) attributable gains being attributed to the whole of it under this section,
- (b) attributable income being attributed to the whole of it under section 541 of ITA 2007, or
- (c) a combination of attributable gains being attributed to some of it under this section and attributable income being attributed to the rest of it under section 541 of ITA 2007.
- (5) See section 256B for the way in which gains are to be attributed to the non-exempt amount under this section.
- (6) In this section and section 256B a charitable trust's “attributable income”, and “attributable gains”, for a tax year have the same meaning as in Part 10 of ITA 2007 (see section 540 of that Act).
##### 256B
- (1) This section is about the ways in which attributable gains can be attributed to a non-exempt amount under section 256A.
- (2) The trustees of the charitable trust may specify the attributable gains that are to be attributed to the non-exempt amount.
- (3) A specification under subsection (2) is made by notice to an officer of Revenue and Customs.
- (4) Subsection (6) applies if—
- (a) an officer of Revenue and Customs requires the trustees of a charitable trust to make a specification under this section, and
- (b) the trustees have not given notice under subsection (3) of the specification before the end of the required period.
- (5) The required period is 30 days beginning with the day on which the officer made the requirement.
- (6) An officer of Revenue and Customs may determine the attributable gains that are to be attributed to the non-exempt amount.
### Deduction of trading losses or post-cessation expenditure etc
##### 261B
- (1) A person may make a claim under this section if—
- (a) relief is available to the person under section 64 or 128 of ITA 2007 (trade or employment loss relief against general income) for a tax year in relation to an amount of loss, and
- (b) the person makes a claim under that section for the amount to be deducted in calculating the person's net income for the tax year.
- (2) A person may also make a claim under this section if—
- (a) relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount of loss, but
- (b) the person's total income for the tax year is nil or does not include any income from which the amount can be deducted.
- (3) A claim under this section is for determining so much of the amount of the loss (“*the relevant amount*”) as—
- (a) is not deducted in calculating the person's net income for the tax year, and
- (b) has not already been taken into account for the purposes of any relief for any other tax year or any year of assessment (whether under ITA 2007, this section or otherwise).
- (4) When the relevant amount can no longer be varied—
- (a) by the tribunal on appeal, or
- (b) on the order of a court,
it is treated for the purposes of capital gains tax as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.
- (5) But so much of the relevant amount as exceeds the maximum amount (see section 261C) is not to be treated for the purposes of capital gains tax as an allowable loss.
- (6) The excess may, however, be used in giving effect to any other loss relief under Part 4 of ITA 2007 (depending on the terms of the relief).
- (7) The amount treated as an allowable loss under this section—
- (a) is no longer to be regarded as an amount available for income tax relief, and
- (b) is not to be deductible from chargeable gains accruing to a person in any year of assessment that begins after the person has permanently ceased to carry on the trade, profession, vocation, employment or office in which the loss was made.
- (8) A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the loss was made in the trade, profession, vocation, employment or office.
- (9) In this section “*normal self-assessment filing date*”, “*tax year*” and “*total income*” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).
##### 261C
- (1) For the purposes of section 261B “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if—
- (a) the provisions mentioned below were ignored, and
- (b) no account were taken of the event mentioned below.
- (2) The provisions are—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) section 3(1) (annual exempt amount), and
- (c) section 261B.
- (3) The event is any event—
- (a) which occurs after the date on which the relevant amount (see section 261B(3)) can no longer be varied by the tribunal on appeal or on the order of a court, and
- (b) in consequence of which the amount chargeable to capital gains tax is reduced as a result of an enactment relating to capital gains tax.
##### 261D
- (1) A person may make a claim under this section if—
- (a) relief is available to the person under section 96 or 125 of ITA 2007 (post-cessation trade or property relief) for a tax year in relation to an amount, and
- (b) the person makes a claim under that section to deduct the amount in calculating the person's net income for the tax year.
- (2) A person may also make a claim under this section if—
- (a) relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount, but
- (b) the person's total income for the tax year is nil.
- (3) A claim under this section is for treating for the purposes of capital gains tax so much of the amount as is not deducted in calculating the person's net income for the tax year (“*the relevant amount*”) as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.
- (4) But so much of the relevant amount as exceeds the maximum amount (see section 261E) is not to be treated for the purposes of capital gains tax as an allowable loss.
- (5) The relevant amount is no longer to be regarded as an amount available for income tax relief.
- (6) A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year mentioned in subsection (1) or (2) (as the case may be).
- (7) In this section “*normal self-assessment filing date*”, “*tax year*” and “*total income*” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).
##### 261E
- (1) For the purposes of section 261D “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if the following were ignored.
- (2) The matters to be ignored are—
- (a) any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 2(2),
- (b) section 3(1) (annual exempt amount), and
- (c) any relief under section 261B or 261D.
### Repurchase price under repos
##### 261F
- (1) This section applies if —
- (a) the repurchase price of UK shares, UK securities or overseas securities is treated by section 604(2), (4) or (5) of ITA 2007 (deemed increase in repurchase price: repos and options) as increased for the purposes of section 607 of that Act (treatment of price differences under repos),
- (b) condition A or B is met, and
- (c) section 263A does not apply.
- (2) Condition A is that, as a result of the increase, there is no difference for the purposes of section 607 of that Act between the sale price and the repurchase price.
- (3) Condition B is that, as a result of an exception in section 608 of that Act, section 607 of that Act does not apply.
- (4) The deemed increase of the repurchase price also has effect for capital gains tax purposes.
- (5) Expressions used in this section and in section 605 of ITA 2007 (deemed increase in repurchase price: other income tax purposes) have the same meanings in this section as in that section.
##### 261G
- (1) Subsections (2) and (3) apply if—
- (a) section 607 of ITA 2007 (treatment of price differences under repos) applies,
- (b) an amount is treated under that section as a payment of interest, and
- (c) section 263A does not apply.
- (2) If the repurchase price is more than the sale price, the repurchase price is treated for capital gains tax purposes as reduced by the amount of the payment of interest.
- (3) If the sale price is more than the repurchase price, the repurchase price is treated for capital gains tax purposes as increased by the amount of the payment of interest.
- (4) Expressions used in this section and in section 609 of ITA 2007 (additional income tax consequences of price differences under repos) have the same meanings in this section as in that section.
##### 261H
- (1) The Treasury may by regulations provide for section 261G to apply with modifications if the exception in section 608(2) of ITA 2007 (agreement not at arm's length) would otherwise prevent it from applying.
- (2) Regulations under this section may make different provision for different cases.
- (3) Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.
- (4) The incidental, supplemental, and consequential provision may include modifications of section 261F (deemed manufactured payments: effect on repurchase price).
- (5) In this section “*modifications*” includes exceptions and omissions.
- (6) Accordingly, the power in subsection (1) includes power to provide for any provision of section 261G not to apply in relation to the case mentioned in that subsection.
##### 263F
- (1) The Treasury may by regulations provide for—
- (a) section 261F (deemed manufactured payments: effect on repurchase price),
- (b) section 261G (price differences under repos: effect on repurchase price),
- (c) section 263A (agreements for sale and repurchase of securities),
- (d) section 263D (gains accruing to persons paying manufactured dividends), or
- (e) any of those sections,
to apply with modifications in relation to non-standard repo cases.
- (2) The power in subsection (1) to make provision for section 263A or 263D to apply with modifications is exercisable only so far as the section applies to cases falling within section 607 of ITA 2007 (treatment of price differences under repos).
- (3) A case is a non-standard repo case if—
- (a) there is a repo in respect of securities,
- (b) under the repo there has been a sale (“the original sale”) of the securities by the original owner to the interim holder, and
- (c) any of conditions A to E is met in relation to the repo.
- (4) Condition A is that—
- (a) the obligation to buy back the securities is not performed, or
- (b) the option to buy them back is not exercised.
- (5) Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities.
- (6) Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities.
- (7) Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations.
- (8) Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period—
- (a) beginning immediately after the making of the agreement for the original sale, and
- (b) ending when the repurchase price becomes due.
- (9) Expressions used in this section and in section 612 of ITA 2007 (powers to modify repo provisions: non-standard repo cases) have the same meanings in this section as in that section.
##### 263G
- (1) The Treasury may by regulations provide for—
- (a) section 261F (deemed manufactured payments: effect on repurchase price),
- (b) section 261G (price differences under repos: effect on repurchase price),
- (c) section 263A (agreements for sale and repurchase of securities),
- (d) section 263D (gains accruing to persons paying manufactured dividends), or
- (e) any of those sections,
to apply with modifications in relation to cases involving redemption arrangements.
- (2) The power in subsection (1) to make provision for section 263A or 263D to apply with modifications is exercisable only so far as the section applies to cases falling within section 607 of ITA 2007 (treatment of price differences under repos).
- (3) A case involves redemption arrangements if—
- (a) arrangements, corresponding to those made in cases where there is a repo, are made by an agreement, or one or more related agreements, in relation to securities that are to be redeemed in the period after their sale,
- (b) the securities are UK shares, UK securities or overseas securities, and
- (c) the arrangements are such that the seller or a person connected with the seller (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will result from the redemption.
- (4) Expressions used in this section and in section 613 of ITA 2007 (powers to modify repo provisions: redemption arrangements) have the same meanings in this section as in that section.
##### 263H
- (1) Regulations under section 263F or 263G may make different provision for different cases.
- (2) Regulations under either section may contain incidental, supplemental, consequential and transitional provision and savings.
- (3) The incidental, supplemental and consequential provision may include—
- (a) in the case of regulations about section 261G, modifications of section 261F, and
- (b) in the case of regulations about section 263A or 263D, modifications of the operation of this Act in relation to cases where, by virtue of the regulations, any acquisition or disposal is excluded from those which are to be ignored for the purposes of capital gains tax.
- (4) In this section and sections 263F and 263G “*modifications*” includes exceptions and omissions.
- (5) Accordingly, a power in sections 263F and 263G to provide for a provision to apply with modifications in relation to a particular case includes power to provide for the provision not to apply in relation to that case.
##### 263I
- (1) The Treasury may by regulations make provision as mentioned in subsection (2) about prescribed cases where a person—
- (a) pays or receives a manufactured overseas dividend as mentioned in section 581(1) of ITA 2007 (manufactured overseas dividends), or
- (b) is treated as doing so for any purposes of Chapter 2 of Part 11 of that Act or regulations made under it (manufactured payments).
- (2) The regulations may provide for adjusting a relevant amount by reference to a provision which has effect under the law of a territory outside the United Kingdom.
- (3) A “relevant amount” is an amount which is treated for prescribed capital gains tax purposes as the amount paid or payable to a person in respect of a relevant transaction.
- (4) A “relevant transaction” is a sale, repurchase or other transfer of the overseas securities to which the manufactured overseas dividend relates.
- (5) In this section “*prescribed*” means prescribed in regulations under this section.
- (6) Subject to that, expressions used in this section and in section 582 of ITA 2007 (manufactured payments: powers about manufactured overseas dividends) have the same meanings in this section as in that section.
#### Chargeable event when replacement property owned.
#### Prevention of double charge.
#### Recovery of tax from donee.
##### 285A
- (1) The following rules about European Economic Interest Groupings apply for the purposes of charging tax in respect of chargeable gains—
- *Rule 1*A grouping is treated as acting as the agent of its members.
- *Rule 2*The activities of a grouping are treated as those of its members acting jointly.
- *Rule 3*Each member of a grouping is treated as having a share of the grouping's property, rights and liabilities.
- *Rule 4*Any trade or profession carried on by the grouping is treated as carried on in partnership by members of the grouping.
- *Rule 5*A person is to be regarded as acquiring or disposing of a share of the assets of the grouping not only where there is an acquisition or disposal of assets by the grouping while he is a member of it, but also where he becomes or ceases to be a member of a grouping or there is a change in his share of the property of the grouping.
- (2) For the purposes of Rule 3, a member's share of any property, rights or liabilities of a grouping is determined according to the contract under which the grouping is established.
- (3) If the contract does not provide for this, the member's share is determined by reference to the share of the profits of the grouping to which the member is entitled under the contract.
- (4) If the contract does not provide for this either, the members are treated as having equal shares of the property, rights and liabilities of the grouping.
- (5) “*European Economic Interest Grouping*” means a European Economic Interest Grouping formed under Council Regulation [(EEC) No 2137/85](https://www.legislation.gov.uk/european/regulation/1985/2137) of 25th July 1985, whether registered in Great Britain, Northern Ireland or elsewhere.
##### 16A
- (1) For the purposes of this Act, “*allowable loss*” does not include a loss accruing to a person if—
- (a) it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
- (b) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.
- (2) For the purposes of subsection (1)—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
- “*tax advantage*” means—relief or increased relief from tax,repayment or increased repayment of tax,the avoidance or reduction of a charge to tax or an assessment to tax, orthe avoidance of a possible assessment to tax,and for the purposes of this definition “*tax*” means capital gains tax, corporation tax or income tax.
- (3) For the purposes of subsection (1) it does not matter—
- (a) whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or
- (b) whether the tax advantage is secured for the person to whom the loss accrues or for any other person.
##### 210C
- (1) Section 18(3) does not apply in relation to a loss accruing on the disposal by an insurance company of authorised investment fund assets to the manager of the authorised investment fund.
- (2) In this section—
- “*authorised investment fund assets*” means assets of the company's long-term insurance fund consisting of rights under an authorised unit trust or shares in an open-ended investment company,
- “*the manager of the authorised investment fund*” means—in the case of an authorised unit trust, the person who is the manager of the unit trust scheme for the purposes of Chapter 3 of Part 17 of the Financial Services and Markets Act 2000, andin the case of an open-ended investment company, a director or other person having responsibility for the management of its scheme property, and
- “*open-ended investment company*” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.
##### 263AZA
- (1) A gain accruing to an individual on a disposal of a renewables obligation certificate is not a chargeable gain if—
- (a) the individual acquired the certificate in connection with the generation of electricity by a microgeneration system,
- (b) the system is installed at or near domestic premises occupied by the individual, and
- (c) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.
- (2) In subsection (1)—
- “*domestic premises*” means premises used wholly or mainly as a separate private dwelling,
- “*microgeneration system*” has the same meaning as in section 4 of the Climate Change and Sustainable Energy Act 2006, and
- “*renewables obligation certificate*” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.
##### 140DA
- (1) This section applies where—
- (a) a transfer of assets to which section 140A(1A) or 140C(1A) applies has taken place,
- (b) the transferor and the transferee (or each of the transferees) are each resident in a member State,
- (c) they are not all resident in the same State, and
- (e) the transfer does not constitute or form part of a scheme of reconstruction within the meaning of section 136.
- (2) Where this section applies, the transfer shall be treated for the purposes of section 136 as if it were a scheme of reconstruction.
- (3) Where section 136 applies by virtue of subsection (2) above section 136(6) (and section 137) shall not apply.
### Transparent entities: disapplication of reliefs related to Mergers Directive
##### 140H
- (1) This section applies if—
- (a) a company (“company B”) issues shares or debentures to a person in exchange for shares in or debentures of another company (“company A”),
- (b) the exchange falls within one of the cases specified in section 135(2), and
- (c) either company B or company A or both is a transparent entity.
- (2) Where this section applies—
- (a) “company” in section 135 shall be treated as meaning an entity listed in the Annex to the Mergers Directive, and
- (b) section 135(3) does not apply.
- (3) If, as a result of an exchange in relation to which this section applies, a gain accruing to a person holding shares in or debentures of company A on the exchange would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, Part 18 of the Taxes Act (double taxation relief), including any arrangements having effect by virtue of section 788 of that Act (bilateral relief), shall apply as if that tax, calculated in accordance with subsection (4), had been chargeable.
- (4) Tax is calculated in accordance with this subsection if—
- (a) so far as permitted under the law of the relevant member State, losses arising on the exchange are set against gains arising on the exchange, and
- (b) any relief available to company A under that law has been claimed.
##### 140I
- (1) This section applies in relation to a transfer of a business, or part of a business, where—
- (a) the transfer is of a kind mentioned in section 140A(1) or (1A) (or which would be of such a kind if the business, or the part of the business, transferred were carried on by the transferor in the United Kingdom and the condition mentioned in section 140A(1)(e) were satisfied in relation to the transferee, or each of the transferees), and
- (b) either the transferor or the transferee, or one of the transferees, is a transparent entity.
- (2) Where this section applies—
- (a) if the transferor is a transparent entity, sections 140A and 140DA do not apply in relation to the transfer;
- (b) if a transferee is a transparent entity, section 140DA does not apply in relation to the transfer to it.
- (3) If, as a result of a transfer in relation to which this section applies, a transfer gain would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, Part 18 of the Taxes Act (double taxation relief), including any arrangements having effect by virtue of section 788 of that Act (bilateral relief), shall apply as if that tax, calculated in accordance with subsection (5), had been chargeable.
- (4) In subsection (3) “transfer gain” means a gain accruing to a transparent entity (or which would be treated as accruing to that entity were it not transparent) by reason of the transfer of assets by the transparent entity to the transferee.
- (5) Tax is calculated in accordance with this subsection if—
- (a) so far as permitted under the law of the relevant member State, losses arising on the transfer are set against gains arising on the transfer, and
- (b) any relief available under that law has been claimed.
##### 140J
- (1) This section applies in relation to a merger if—
- (a) the merger is of a kind mentioned in section 140E(1),
- (b) the conditions in section 140E(2) are satisfied in relation to the merger, and
- (c) one or more of the merging companies is a transparent entity.
- (2) Where this section applies—
- (a) if the assets and liabilities of a transparent entity are transferred to another company by reason of the merger, sections 140E and 140G shall not apply;
- (b) if the assets and liabilities of one or more other companies are transferred to a transparent entity by reason of the merger section 140G shall not apply.
- (3) If, as a result of a merger in relation to which this section applies, a merger gain would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, Part 18 of the Taxes Act (double taxation relief), including any arrangements having effect by virtue of section 788 of that Act (bilateral relief) shall apply as if that tax, calculated in accordance with subsection (5), had been chargeable.
- (4) In subsection (3) “merger gain” means a gain accruing to a transparent entity (or which would be treated as accruing to that entity were it not transparent) by reason of the transfer of assets by the transparent entity to another company on the merger.
- (5) Tax is calculated in accordance with this subsection if—
- (a) so far as permitted under the law of the relevant member State, losses arising on the merger are set against gains arising on the merger, and
- (b) any relief available under that law has been claimed.
##### 140K
- (1) This section applies if—
- (a) a transparent entity (“company A”) is a transferee for the purposes of section 140A(1A) or 140E,
- (b) a person (“X”) with an interest in company A was or is also a shareholder or debenture holder of a company (“company B”),
- (c) X became entitled to an interest, or an increased interest, in company A in exchange for a disposal of shares in, or debentures of, company B on a merger to which section 140E applied or on a transfer to which section 140A(1A) applied,
- (d) a chargeable gain accrued to X on the disposal of shares in or debentures of company B,
- (e) in calculating the gain on the shares or debentures account was taken of the value of an asset of company B, and
- (f) X makes a disposal of his interest in the asset.
- (2) In computing the gain accruing to X on a disposal to which subsection (1)(f) applies, the sum allowable as a deduction in accordance with section 38(1)(a) in relation to the interest, or the proportion of the interest, which X acquired on the merger or transfer shall be the value taken into account in computing the gain on the disposal of his shares in, or debentures of, company B.
- (3) In this section a reference to an interest in company A includes—
- (a) an interest in the assets of company A,
- (b) shares in company A, and
- (c) debentures of company A.
##### 140L
- (1) In sections 140A to 140K and this section, unless the contrary intention appears—
- (a) “the Mergers Directive” means Council Directive [90/434/EEC](https://www.legislation.gov.uk/european/directive/1990/0434) of 23rd July 1990 on mergers, transfers &c.,
- (b) “company” means an entity listed as a company in the Annex to the Mergers Directive, and
- (c) “transparent entity” means an entity which is resident in a member State other than the United Kingdom and is listed as a company in the Annex to the Mergers Directive, but—
- (i) does not have an ordinary share capital (within the meaning given by section 832 of the Taxes Act), and
- (ii) if it were resident in the United Kingdom, would not be capable of being a company within the meaning given by the Companies Act 2006.
- (2) For the purposes of those sections and subsection (1) above, a company is resident in a member State if—
- (a) it is within a charge to tax under the law of the State as being resident for that purpose, and
- (b) it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.
#### Company that receives mixed consideration: N does not exceed C
#### De-registration of registered pension schemes
##### 140GA
Sections 24 and 122 do not apply if—
- (a) a merger is effected by the transfer by a company (“the transferor company”) of all of its assets and liabilities to a single company that holds the whole of the ordinary share capital in the transferor company,
- (b) each merging company is resident in a member State,
- (c) the merging companies are not all resident in the same State,
- (d) section 139 does not apply in relation to the transfer, and
- (e) in the course of the merger the transferor company ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986 (c. 55).
##### 14A
- (1) This section applies if—
- (a) by virtue of section 13, part of a chargeable gain that accrues to a company on the disposal of an asset is treated as accruing to an individual in a tax year, and
- (b) the individual is not domiciled in the United Kingdom in that year.
- (2) The part of the chargeable gain treated as accruing to the individual (“the deemed chargeable gain”) is a foreign chargeable gain within the meaning of section 12 if (and only if) the asset is situated outside the United Kingdom.
- (3) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis)—
- (a) treat any consideration obtained by the company on the disposal of the asset as deriving from the deemed chargeable gain, and
- (b) unless the consideration so obtained is of an amount at least equal to the market value of the asset, treat the asset as deriving from the deemed chargeable gain.
- (4) If—
- (a) the deemed chargeable gain is a foreign chargeable gain (within the meaning of section 12),
- (b) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for the year mentioned in subsection (1), and
- (c) any of the deemed chargeable gain is remitted to the United Kingdom in a tax year after that year,
the chargeable gain treated under section 12(2) as accruing may not be reduced or extinguished under section 13(8).
##### 16ZA
- (1) In this section “*the relevant tax year*”, in relation to an individual, means the first tax year for which—
- (a) section 809B of ITA 2007 (claim for remittance basis) applies to the individual, and
- (b) the individual is not domiciled in the United Kingdom.
- (2) An individual may make an election under this section for the relevant tax year (in which case sections 16ZB and 16ZC have effect in relation to the individual for the relevant tax year and all subsequent tax years).
- (3) If an individual does not make such an election, foreign losses accruing to the individual in—
- (a) the relevant tax year, or
- (b) any subsequent tax year except one in which the individual is domiciled in the United Kingdom,
are not allowable losses.
- (4) Sections 42 and 43 of the Management Act (procedure and time limit for making claims), except section 42(1A) of that Act, apply in relation to an election under this section as they apply in relation to a claim for relief.
- (5) An election under this section is irrevocable.
- (6) In this section “*foreign loss*” means a loss accruing from the disposal of an asset situated outside the United Kingdom.
##### 16ZB
- (1) This section applies to an individual for a tax year (“the applicable tax year”) if—
- (a) the individual has made an election under section 16ZA,
- (b) foreign chargeable gains accrued to the individual in or after the relevant tax year (within the meaning of section 16ZA) but before the applicable tax year, and
- (c) by reason of the remission of any of the foreign chargeable gains to the United Kingdom, chargeable gains are treated under section 12 as accruing to the individual in the applicable tax year (“the relevant gains”).
- (2) Section 2(2) or (4) has effect for the applicable tax year as if the relevant gains had not accrued.
- (3) The amount on which the individual is charged to capital gains tax for the applicable tax year is (instead of the amount given by section 2(2) or (4)(b), as reduced under section 3) the sum of—
- (a) the adjusted taxable amount, and
- (b) the amount of the relevant gains.
- (4) “*The adjusted taxable amount*” is—
- (a) if section 3(1) (annual exempt amount) does not apply to the individual for the applicable tax year, the amount given by section 2(2) or (4)(b) as it has effect by virtue of subsection (2), and
- (b) otherwise, so much of that amount as exceeds the exempt amount for the applicable tax year (within the meaning of section 3).
- (5) In subsection (1) “*foreign chargeable gains*” has the meaning given by section 12(4).
- (6) For the purposes of subsection (1)(c) foreign chargeable gains are remitted to the United Kingdom if they are regarded as so remitted for the purposes of section 12.
##### 16ZC
- (1) This section applies to an individual for a tax year if—
- (a) the individual has made an election under section 16ZA for the tax year or any earlier tax year,
- (b) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for the tax year, and
- (c) the individual is not domiciled in the United Kingdom in the tax year.
- (2) The following steps apply for the purpose of calculating the amount on which the individual is to be charged to capital gains tax for the tax year.
- *Step 1*Deduct any relevant allowable losses from the chargeable gains referred to in subsection (3) in the order in which they appear there (starting with paragraph (a) of that subsection).If allowable losses are deductible from the chargeable gains referred to in subsection (3)(b) but are not enough to exhaust them all—those chargeable gains are to be ordered according to the day on which they accrued,the losses are to be deducted from those gains in reverse chronological order (starting with the last chargeable gain to accrue), andif allowable losses are deductible from chargeable gains that accrued on a particular day but are not enough to exhaust all of the chargeable gains that accrued on that day, the amount deducted from each of those chargeable gains is the appropriate proportion of the losses.In paragraph (c) “*the appropriate proportion*”, in relation to a chargeable gain, is the amount of that gain divided by the total amount of the chargeable gains that accrued on the day in question.
- *Step 2*Treat the amount referred to in section 2(2) or (4)(a) or 16ZB(3)(a) as being equal to—the amount it would be if there were no relevant allowable losses, minusthe total amount deducted under Step 1 from chargeable gains within subsection (3)(a) or (c).
- (3) The chargeable gains are—
- (a) foreign chargeable gains accruing to the individual in the tax year, to the extent that they are remitted to the United Kingdom in that year,
- (b) foreign chargeable gains accruing to the individual in that year, to the extent that they are not so remitted in that year, and
- (c) chargeable gains accruing to the individual in that year (other than foreign chargeable gains).
- (4) Chargeable gains treated as accruing under section 87 or 89(2) (read, where appropriate, with section 10A) are not within any paragraph of subsection (3).
- (5) Chargeable gains treated as accruing under section 12 are not within subsection (3)(c).
- (6) For the purposes of subsection (3) foreign chargeable gains are remitted to the United Kingdom if they are regarded as so remitted for the purposes of section 12.
- (7) In this section—
- “*relevant allowable losses*” means the allowable losses that section 2(2) provides may be deducted from chargeable gains accruing to the individual in the tax year, and
- “*foreign chargeable gains*” has the meaning given by section 12(4).
##### 16ZD
- (1) This section applies if section 16ZC applies to an individual for a tax year.
- (2) Any allowable loss deducted under step 1 of section 16ZC(2) is to be regarded (for the purposes of section 2(2)(b)) as allowed as a deduction from chargeable gains accruing to the individual in the tax year.
- (3) If a deduction is made under step 1 of section 16ZC(2) from a foreign chargeable gain within section 16ZC(3)(b), the amount of the foreign chargeable gain is reduced by the amount deducted.
#### Disposals in cases of hire-purchase and similar transactions.
##### 35A
- (1) This section applies for the purposes of capital gains tax in relation to a disposal of an asset if—
- (a) the person making the disposal acquired the asset after 31 March 1982 and before 6 April 2008,
- (b) the disposal by which the person acquired the asset (“the relevant disposal”), and any previous disposal of the asset after 31 March 1982, was a disposal on which, by virtue of any enactment, neither a gain nor a loss accrued to the person making the disposal, and
- (c) section 35(2) did not apply to the relevant disposal.
- (2) It is to be assumed that section 35(2) did apply to the relevant disposal (and that section 56(2) applied to the relevant disposal accordingly).
#### Restriction of losses: long funding leases of plant or machinery
#### Death: application of law in Northern Ireland
##### 52A
This Chapter applies only for the purposes of corporation tax.
##### 87A
- (1) This section supplements section 87.
- (2) The following steps are to be taken for the purposes of matching capital payments with section 2(2) amounts.
- *Step 1*Find the section 2(2) amount for the relevant tax year.
- *Step 2*Find the total amount of capital payments received by the beneficiaries from the trustees in the relevant tax year.
- *Step 3*The section 2(2) amount for the relevant tax year is matched with—if the total amount of capital payments received in the relevant tax year does not exceed the section 2(2) amount for the relevant tax year, each capital payment so received, andotherwise, the relevant proportion of each of those capital payments.“*The relevant proportion*” is the section 2(2) amount for the relevant tax year divided by the total amount of capital payments received in the relevant tax year.
- *Step 4*If paragraph (a) of Step 3 applies—reduce the section 2(2) amount for the relevant tax year by the total amount of capital payments referred to there, andreduce the amount of those capital payments to nil.If paragraph (b) of that Step applies—reduce the section 2(2) amount for the relevant tax year to nil, andreduce the amount of each of the capital payments referred to there by the relevant proportion of that capital payment.
- *Step 5*Start again at Step 1 (unless subsection (3) applies).If the section 2(2) amount for the relevant tax year (as reduced under Step 4) is not nil, read references to capital payments received in the relevant tax year as references to capital payments received in the latest tax year which—is before the last tax year for which Steps 1 to 4 have been undertaken, andis a tax year in which capital payments (the amounts of which have not been reduced to nil) were received by beneficiaries.If the section 2(2) amount for the relevant tax year (as so reduced) is nil, read references to the section 2(2) amount for the relevant tax year as the section 2(2) amount for the latest tax year—which is before the last tax year for which Steps 1 to 4 have been undertaken, andfor which the section 2(2) amount is not nil.
- (3) This subsection applies if—
- (a) all of the capital payments received by beneficiaries from the trustees in the relevant tax year or any earlier tax year have been reduced to nil, or
- (b) the section 2(2) amounts for the relevant tax year and all earlier tax years have been reduced to nil.
- (4) The effect of any reduction under Step 4 of subsection (2) is to be taken into account in any subsequent application of this section.
##### 87B
- (1) This section applies if—
- (a) chargeable gains are treated under section 87 as accruing to an individual in a tax year,
- (b) section 809B, 809D or 809E (remittance basis) applies to the individual for that year, and
- (c) the individual is not domiciled in the United Kingdom in that year.
- (2) The chargeable gains are foreign chargeable gains within the meaning of section 12 (non-UK domiciled beneficiaries to whom remittance basis applies).
- (3) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis) treat relevant property or benefits as deriving from the chargeable gains.
- (4) For the purposes of subsection (3) property or a benefit is “relevant” if the capital payment by reason of which the chargeable gains are treated as accruing consists of—
- (a) the payment or transfer of the property or its becoming property to which section 60 applies, or
- (b) the conferring of the benefit.
##### 87C
- (1) For the purposes of sections 87 and 87A as they apply in relation to a settlement, no account is to be taken of a capital payment (or a part of a capital payment) within subsection (2).
- (2) A capital payment is within this subsection if (and to the extent that) it is received (or treated as received) in a tax year from the trustees of the settlement by a company that—
- (a) is not resident in the United Kingdom in that year, and
- (b) would be a close company if it were resident in the United Kingdom,
(and is not treated under any of subsections (3) to (5) of section 96 as received by another person).
##### 90A
- (1) Section 90 does not apply to a transfer of settled property made for consideration in money or money's worth if the amount (or value) of that consideration is equal to or exceeds the market value of the property transferred.
- (2) The following provisions apply if—
- (a) section 90 applies to a transfer of settled property made for consideration in money or money's worth, and
- (b) the amount (or value) of that consideration is less than the market value of the property transferred.
- (3) If the transfer is of all of the settled property, for the purposes of section 90 treat the transfer as being of part only of the settled property.
- (4) Deduct the amount (or value) of the consideration from the amount of the market value referred to in section 90(4)(a).
##### 119B
- (1) For the purposes of section 119A reduce the amount that counts as employment income by so much of that amount (if any) as is unremitted foreign securities income.
- (2) In this section “*unremitted foreign securities income*” means income that—
- (a) is foreign securities income for the purposes of section 41A of ITEPA 2003 (employment income from ERS charged on remittance basis), and
- (b) has not been remitted to the United Kingdom by the end of the tax year in which the disposal mentioned in section 119A(1) occurs.
- (3) The following provisions apply if any of the unremitted foreign securities income is remitted to the United Kingdom after the end of the tax year referred to in subsection (2)(b).
- (4) The person liable for the capital gains tax on any chargeable gains arising on the disposal may make a claim for section 119A(2) to have effect as if the remitted income had been remitted before the end of that tax year.
- (5) All adjustments (by way of repayment of tax, assessment or otherwise) are to be made which are necessary to give effect to a claim under subsection (4).
- (6) Those adjustments may be made at any time, despite anything to the contrary in any enactment relating to capital gains tax.
##### 165A
- (1) This section has effect for the interpretation of section 165 (and this section).
- (2) “*Holding company*” means a company that has one or more 51% subsidiaries.
- (3) “*Trading company*” means a company carrying on trading activities whose activities do not include to a substantial extent activities other than trading activities.
- (4) For the purposes of subsection (3) above “*trading activities*” means activities carried on by the company—
- (a) in the course of, or for the purposes of, a trade being carried on by it,
- (b) for the purposes of a trade that it is preparing to carry on,
- (c) with a view to its acquiring or starting to carry on a trade, or
- (d) with a view to its acquiring a significant interest in the share capital of another company that—
- (i) is a trading company or the holding company of a trading group, and
- (ii) if the acquiring company is a member of a group of companies, is not a member of that group.
- (5) Activities do not qualify as trading activities under subsection (4)(c) or (d) above unless the acquisition is made, or the company starts to carry on the trade, as soon as is reasonably practicable in the circumstances.
- (6) The reference in subsection (4)(d) above to the acquisition of a significant interest in the share capital of another company is to an acquisition of ordinary share capital in the other company—
- (a) such as would make that company a 51% subsidiary of the acquiring company, or
- (b) such as would give the acquiring company a qualifying shareholding in a joint venture company without making the two companies members of the same group of companies.
- (7) For the purpose of determining whether a company which has a qualifying shareholding in a joint venture company is a trading company—
- (a) any holding by it of shares in the joint venture company is to be disregarded, and
- (b) it is to be treated as carrying on an appropriate proportion of the activities of the joint venture company or, where the joint venture company is the holding company of a trading group, of the activities of that group;
and in paragraph (b) above “*appropriate proportion*” means a proportion corresponding to the percentage of the ordinary share capital of the joint venture company held by the company.
- (8) “*Trading group*” means a group of companies—
- (a) one or more of whose members carry on trading activities, and
- (b) the activities of whose members, taken together, do not include to a substantial extent activities other than trading activities.
- (9) For the purposes of subsection (8) above “*trading activities*” means activities carried on by a member of the group—
- (a) in the course of, or for the purposes of, a trade being carried on by any member of the group,
- (b) for the purposes of a trade that any member of the group is preparing to carry on,
- (c) with a view to any member of the group acquiring or starting to carry on a trade, or
- (d) with a view to any member of the group acquiring a significant interest in the share capital of another company that—
- (i) is a trading company or the holding company of a trading group, and
- (ii) is not a member of the same group of companies as the acquiring company.
- (10) Activities do not qualify as trading activities under subsection (9)(c) or (d) above unless the acquisition is made, or the group member in question starts to carry on the trade, as soon as is reasonably practicable in the circumstances.
- (11) The reference in subsection (9)(d) above to the acquisition of a significant interest in the share capital of another company is to an acquisition of ordinary share capital in the other company—
- (a) such as would make that company a member of the same group of companies as the acquiring company, or
- (b) such as would give the acquiring company a qualifying shareholding in a joint venture company without making the joint venture company a member of the same group of companies as the acquiring company.
- (12) For the purpose of determining whether a group of companies is a trading group in a case where any one or more members of the group has a qualifying shareholding in a joint venture company which is not a member of the group—
- (a) every holding of shares in the joint venture company by a member of the group having a qualifying shareholding in it is to be disregarded, and
- (b) each member of the group having such a qualifying shareholding is to be treated as carrying on an appropriate proportion of the activities of the joint venture company or, where the joint venture company is a holding company of a trading group, of the activities of that group;
and in paragraph (b) above “*appropriate proportion*” means a proportion corresponding to the percentage of the ordinary share capital of the joint venture company held by the member of the group.
- (13) For the purposes of this section the activities of the members of a group of companies are to be treated as one business (with the result that activities are disregarded to the extent that they are intra-group activities).
- (14) In this section—
- “*51% subsidiary*” has the meaning given by section 838 of the Taxes Act,
- “*group of companies*” means a company which has one or more 51% subsidiaries together with those subsidiaries,
- “*joint venture company*” means a company—which is a trading company or the holding company of a trading group, and75% or more of the ordinary share capital of which (in aggregate) is held by not more than 5 persons (the shareholdings of members of a group of companies being regarded for the purposes of this paragraph as held by a single company),
- “*ordinary share capital*” has the meaning given by section 989 of ITA 2007,
- “*qualifying shareholding*”, in relation to a company and a joint venture company, means—the holding by the company of 10% or more of the ordinary share capital of the joint venture company, or(where the company is a member of a group of companies) the holding by the company and the other members of the group (between them) of 10% or more of that ordinary share capital, and
- “*trade*” means (subject to section 241(3)) anything which—is a trade, profession or vocation, within the meaning of the Income Tax Acts, andis conducted on a commercial basis and with a view to the realisation of profits.
### Chapter 3 — Entrepreneurs’ relief
##### 169H
- (1) This Chapter provides relief from capital gains tax in respect of qualifying business disposals (to be known as “*entrepreneurs' relief*”).
- (2) The following are qualifying business disposals—
- (a) a material disposal of business assets: see section 169I,
- (b) a disposal of trust business assets: see section 169J, and
- (c) a disposal associated with a relevant material disposal: see section 169K.
- (3) But in the case of certain qualifying business disposals, entrepreneurs' relief is given only in respect of disposals of relevant business assets comprised in the qualifying business disposal: see section 169L.
- (4) Section 169M makes provision requiring the making of a claim for entrepreneurs' relief.
- (5) Sections 169N to 169P make provision as to the amount of entrepreneurs' relief.
- (6) Sections 169Q and 169R make provision about reorganisations.
- (7) Section 169S contains interpretative provisions for the purposes of this Chapter.
##### 169I
- (1) There is a material disposal of business assets where—
- (a) an individual makes a disposal of business assets (see subsection (2)), and
- (b) the disposal of business assets is a material disposal (see subsections (3) to (7)).
- (2) For the purposes of this Chapter a disposal of business assets is—
- (a) a disposal of the whole or part of a business,
- (b) a disposal of (or of interests in) one or more assets in use, at the time at which a business ceases to be carried on, for the purposes of the business, or
- (c) a disposal of one or more assets consisting of (or of interests in) shares in or securities of a company.
- (3) A disposal within paragraph (a) of subsection (2) is a material disposal if the business is owned by the individual throughout the period of 1 year ending with the date of the disposal.
- (4) A disposal within paragraph (b) of that subsection is a material disposal if—
- (a) the business is owned by the individual throughout the period of 1 year ending with the date on which the business ceases to be carried on, and
- (b) that date is within the period of 3 years ending with the date of the disposal.
- (5) A disposal within paragraph (c) of subsection (2) is a material disposal if condition A or B is met.
- (6) Condition A is that, throughout the period of 1 year ending with the date of the disposal—
- (a) the company is the individual's personal company and is either a trading company or the holding company of a trading group, and
- (b) the individual is an officer or employee of the company or (if the company is a member of a trading group) of one or more companies which are members of the trading group.
- (7) Condition B is that the conditions in paragraphs (a) and (b) of subsection (6) are met throughout the period of 1 year ending with the date on which the company—
- (a) ceases to be a trading company without continuing to be or becoming a member of a trading group, or
- (b) ceases to be a member of a trading group without continuing to be or becoming a trading company,
and that date is within the period of 3 years ending with the date of the disposal.
- (8) For the purposes of this section—
- (a) an individual who disposes of (or of interests in) assets used for the purposes of a business carried on by the individual on entering into a partnership which is to carry on the business is to be treated as disposing of a part of the business,
- (b) the disposal by an individual of the whole or part of the individual's interest in the assets of a partnership is to be treated as a disposal by the individual of the whole or part of the business carried on by the partnership, and
- (c) at any time when a business is carried on by a partnership, the business is to be treated as owned by each individual who is at that time a member of the partnership.
##### 169J
- (1) There is a disposal of trust business assets where—
- (a) the trustees of a settlement make a disposal of settlement business assets (see subsection (2)),
- (b) there is an individual who is a qualifying beneficiary (see subsection (3)), and
- (c) the relevant condition is met (see subsections (4) and (5)).
- (2) In this Chapter “*settlement business assets*” means—
- (a) assets consisting of (or of interests in) shares in or securities of a company, or
- (b) assets (or interests in assets) used or previously used for the purposes of a business,
which are part of the settled property.
- (3) An individual is a qualifying beneficiary if the individual has, under the settlement, an interest in possession (otherwise than for a fixed term) in—
- (a) the whole of the settled property, or
- (b) a part of it which consists of or includes the settlement business assets disposed of.
- (4) In relation to a disposal of settlement business assets within paragraph (a) of subsection (2) the relevant condition is that, throughout a period of 1 year ending not earlier than 3 years before the date of the disposal—
- (a) the company is the qualifying beneficiary's personal company and is either a trading company or the holding company of a trading group, and
- (b) the qualifying beneficiary is an officer or employee of the company or (if the company is a member of a group of companies) of one or more companies which are members of the trading group.
- (5) In relation to a disposal of settlement business assets within paragraph (b) of that subsection, the relevant condition is that—
- (a) the settlement business assets are used for the purposes of the business carried on by the qualifying beneficiary throughout the period of 1 year ending not earlier than 3 years before the date of the disposal, and
- (b) the qualifying beneficiary ceases to carry on the business on the date of the disposal or within the period of three years before that date.
- (6) In subsection (5)—
- (a) the reference to a business carried on by the qualifying beneficiary includes a business carried on by a partnership of which the qualifying beneficiary is a member, and
- (b) the reference to the qualifying beneficiary ceasing to carry on the business includes the qualifying beneficiary ceasing to be a member of the partnership or the partnership ceasing to carry on the business.
##### 169K
- (1) There is a disposal associated with a relevant material disposal if conditions A, B and C are met.
- (2) Condition A is that an individual makes a material disposal of business assets which consists of—
- (a) the disposal of the whole or part of the individual's interest in the assets of a partnership, or
- (b) the disposal of (or of interests in) shares in or securities of a company.
- (3) Condition B is that the individual makes the disposal as part of the withdrawal of the individual from participation in the business carried on by the partnership or by the company or (if the company is a member of a trading group) a company which is a member of the trading group.
- (4) Condition C is that, throughout the period of 1 year ending with the earlier of—
- (a) the date of the material disposal of business assets, and
- (b) the cessation of the business of the partnership or company,
the assets which (or interests in which) are disposed of are in use for the purposes of the business.
- (5) For the purposes of this Chapter the disposal mentioned in Condition B is the disposal associated with a relevant material disposal.
##### 169L
- (1) If a qualifying business disposal is one which does not consist of the disposal of (or of interests in) shares in or securities of a company, entrepreneurs' relief is given only in respect of the disposal of relevant business assets comprised in the qualifying business disposal.
- (2) In this Chapter “*relevant business assets*” means assets (including goodwill) which are, or are interests in, assets to which subsection (3) applies, other than excluded assets (see subsection (4) below).
- (3) This subsection applies to assets which—
- (a) in the case of a material disposal of business assets, are assets used for the purposes of a business carried on by the individual or a partnership of which the individual is a member,
- (b) in the case of a disposal of trust business assets, are assets used for the purposes of a business carried on by the qualifying beneficiary or a partnership of which the qualifying beneficiary is a member, or
- (c) in the case of a disposal associated with a relevant material disposal, are assets used for the purposes of a business carried on by the partnership or company.
- (4) The following are excluded assets—
- (a) shares and securities, and
- (b) assets, other than shares or securities, which are held as investments.
##### 169M
- (1) Entrepreneurs' relief is to be given only on the making of a claim.
- (2) A claim for entrepreneurs' relief in respect of a qualifying business disposal must be made—
- (a) in the case of a disposal of trust business assets, jointly by the trustees and the qualifying beneficiary, and
- (b) otherwise, by the individual.
- (3) A claim for entrepreneurs' relief in respect of a qualifying business disposal must be made on or before the first anniversary of the 31 January following the tax year in which the qualifying business disposal is made.
- (4) A claim for entrepreneurs' relief in respect of a qualifying business disposal may only be made if the amount resulting under section 169N(1) is a positive amount.
##### 169N
- (1) Where a claim is made in respect of a qualifying business disposal—
- (a) the relevant gains (see subsection (5)) are to be aggregated, and
- (b) any relevant losses (see subsection (6)) are to be aggregated and deducted from the aggregate arrived at under paragraph (a).
- (2) The resulting amount is to be reduced by 4/9ths.
- (3) But if the aggregate of—
- (a) the amount resulting under subsection (1), and
- (b) the total of the amounts resulting under that subsection by virtue of its operation in relation to earlier relevant qualifying business disposals (if any),
exceeds £1 million, the reduction is to be made in respect of only so much (if any) of the amount resulting under subsection (1) as (when added to that total) does not exceed £1 million.
- (4) The amount arrived at under subsections (1) to (3) is to be treated for the purposes of this Act as a chargeable gain accruing at the time of the disposal to the individual or trustees by whom the claim is made.
- (5) In subsection (1)(a) “*relevant gains*” means—
- (a) if the qualifying business disposal is of (or of interests in) shares in or securities of a company (or both), the gains accruing on the disposal (computed in accordance with the provisions of this Act fixing the amount of chargeable gains), and
- (b) otherwise, the gains accruing on the disposal of any relevant business assets comprised in the qualifying business disposal (so computed).
- (6) In subsection (1)(b) “*relevant losses*” means—
- (a) if the qualifying business disposal is of (or of interests in) shares in or securities of a company (or both), any losses accruing on the disposal (computed in accordance with the provisions of this Act fixing the amount of allowable losses, on the assumption that notice has been given under section 16(2A) in respect of them), and
- (b) otherwise, any losses accruing on the disposal of any relevant business assets comprised in the qualifying business disposal (so computed, on that assumption).
- (7) In subsection (3) “*earlier relevant qualifying business disposals*” means—
- (a) where the qualifying business disposal is made by an individual, earlier qualifying business disposals made by the individual and earlier disposals of trust business assets in respect of which the individual is the qualifying beneficiary, and
- (b) where the qualifying business disposal is a disposal of trust business assets in respect of which an individual is the qualifying beneficiary, earlier disposals of trust business assets in respect of which that individual is the qualifying beneficiary and earlier qualifying business disposals made by that individual.
- (8) If, on the same day, there is both a disposal of trust business assets in respect of which an individual is the qualifying beneficiary and a qualifying business disposal by the individual, this section applies as if the disposal of trust business assets were later.
- (9) Any gain or loss taken into account under subsection (1) is not to be taken into account under this Act as a chargeable gain or an allowable loss.
##### 169O
- (1) This section applies where, on a disposal of trust business assets, there is (in addition to the qualifying beneficiary) at least one other beneficiary who, at the material time, has an interest in possession in—
- (a) the whole of the settled property, or
- (b) a part of it which consists of or includes the shares or securities (or interests in shares or securities) or assets (or interests in assets) disposed of.
- (2) Only the relevant proportion of the amount which would otherwise result under subsection (1) of section 169N is to be treated as so resulting.
- (3) And the balance of that amount, with no reduction under subsection (2) of that section, is accordingly a chargeable gain for the purposes of this Act.
- (4) For the purposes of this section “the relevant proportion” of an amount is the same proportion of the amount as that which, at the material time—
- (a) the qualifying beneficiary's interest in the income of the part of the settled property comprising the shares or securities (or interests in shares or securities) or assets (or interests in assets) disposed of, bears to
- (b) the interests in that income of all the beneficiaries (including the qualifying beneficiary) who then have interests in possession in that part of the settled property.
- (5) In subsection (4) “*the qualifying beneficiary's interest*” means the interest by virtue of which he is the qualifying beneficiary (and not any other interest the qualifying beneficiary may have).
- (6) In this section “*the material time*” means the end of the latest period of 1 year which ends not earlier than 3 years before the date of the disposal and—
- (a) in the case of a disposal of settlement business assets within paragraph (a) of subsection (2) of section 169J, throughout which the conditions in paragraphs (a) and (b) of subsection (4) of that section are met, and
- (b) in the case of a disposal of settlement business assets within paragraph (b) of subsection (2) of that section, throughout which the business is carried on by the qualifying beneficiary.
##### 169P
- (1) This section applies where, on a disposal associated with a relevant material disposal, any of the conditions in subsection (4) is met.
- (2) Only such part of the amount which would otherwise result under subsection (1) of section 169N as is just and reasonable is to be treated as so resulting.
- (3) And the balance of that amount, with no reduction under subsection (2) of that section, is accordingly a chargeable gain for the purposes of this Act.
- (4) The conditions referred to in subsection (1) are—
- (a) that the assets which (or interests in which) are disposed of are in use for the purposes of the business for only part of the period in which they are in the ownership of the individual,
- (b) that only part of the assets which (or interests in which) are disposed of are in use for the purposes of the business for that period,
- (c) that the individual is concerned in the carrying on of the business (whether personally, as a member of a partnership or as an officer or employee of a company which is the individual's personal company) for only part of the period in which the assets which (or interests in which) are disposed of are in use for the purposes of the business, and
- (d) that, for the whole or any part of the period for which the assets which (or interests in which) are disposed of are in use for the purposes of the business, their availability is dependent on the payment of rent.
- (5) In determining how much of an amount it is just and reasonable to bring into account under subsection (2) regard is to be had to—
- (a) in a case within paragraph (a) of subsection (4), the length of the period for which the assets are in use as mentioned in that paragraph,
- (b) in a case within paragraph (b) of that subsection, the part of the assets that are in use as mentioned in that paragraph,
- (c) in a case within paragraph (c) of that subsection, the length of the period for which the individual is concerned in the carrying on of the business as mentioned in that paragraph, and
- (d) in a case within paragraph (d) of that subsection, the extent to which any rent paid is less than the amount which would be payable in the open market for the use of the assets.
##### 169Q
- (1) This section applies where—
- (a) there is a reorganisation (within the meaning of section 126), and
- (b) the original shares and the new holding (within the meaning of that section) would fall to be treated by virtue of section 127 as the same asset.
- (2) If an election is made under this section, a claim for entrepreneurs' relief may be made as if the reorganisation involved a disposal of the original shares; and if such a claim is made section 127 does not apply.
- (3) An election under this section must be made—
- (a) if the reorganisation would (apart from section 127) involve a disposal of trust business assets, jointly by the trustees and the qualifying beneficiary, and
- (b) otherwise, by the individual.
- (4) An election under this section must be made on or before the first anniversary of the 31 January following the tax year in which the reorganisation takes place.
- (5) The references in this section to a reorganisation (within the meaning of section 126) includes an exchange of shares or securities which is treated as such a reorganisation by virtue of section 135 or 136.
##### 169R
- (1) This section applies where the calculation under section 116(10)(a) has effect to produce a chargeable gain for an individual by reason of a relevant transaction.
- (2) This Chapter has effect as if—
- (a) (despite section 116(10)) the relevant transaction were a disposal, and
- (b) the disposal were a disposal of business assets consisting of the old asset made by the individual at the time of the relevant transaction.
- (3) Where the disposal would be a material disposal of business assets and entrepreneurs' relief is claimed in respect of it—
- (a) the amount resulting under section 169N(1) is to be taken to be the amount of the chargeable gain produced by the calculation under section 116(10)(a), and
- (b) accordingly, the amount arrived at under section 169N(1) to (3) (or a corresponding part of it) is the amount deemed to accrue by virtue of section 116(10)(b) on a disposal of the whole or part of the new asset.
- (4) In this section “new asset”, “old asset” and “relevant transaction” have the meaning given by section 116.
##### 169S
- (1) For the purposes of this Chapter “*a business*” means anything which—
- (a) is a trade, profession or vocation, and
- (b) is conducted on a commercial basis and with a view to the realisation of profits.
- (2) References in this Chapter to a disposal of an interest in shares in a company include a disposal of an interest in shares treated as made by virtue of section 122.
- (3) For the purposes of this Chapter “*personal company*”, in relation to an individual, means a company—
- (a) at least 5% of the ordinary share capital of which is held by the individual, and
- (b) at least 5% of the voting rights in which are exercisable by the individual by virtue of that holding.
- (4) For the purposes of subsection (3) if the individual holds any shares in the company jointly or in common with one or more other persons, the individual is to be treated as sole holder of so many of them as is proportionate to the value of the individual's share (and as able to exercise voting rights by virtue of that holding).
- (5) In this Chapter—
- “*disposal associated with a relevant material disposal*” has the meaning given by section 169K,
- “*disposal of business assets*” has the meaning given by section 169I(2),
- “*disposal of trust business assets*” has the meaning given by section 169J,
- “*employment*” has the meaning given by section 4 of ITEPA 2003,
- “*entrepreneurs' relief*” has the meaning given by section 169H(1),
- “*holding company*” has the same meaning as in section 165 (see section 165A),
- “*material disposal of business assets*” has the meaning given by section 169I,
- “*office*” has the meaning given by section 5(3) of ITEPA 2003,
- “*ordinary share capital*” has the same meaning as in the Income Tax Acts (see section 989 of ITA 2007),
- “*qualifying business disposal*” has the meaning given by section 169H(2),
- “*relevant business asset*” has the meaning given by section 169L,
- “*rent*”, in relation to an asset, includes any form of consideration given for the use of the asset,
- “*securities*”, in relation to a company, includes any debentures of the company which are deemed by subsection (6) of section 251 to be securities for the purposes of that section,
- “*settlement business assets*” has the meaning given by section 169J(2),
- “*trade*” has the same meaning as in the Income Tax Acts (see section 989 of ITA 2007), and
- “*trading company*” and “*trading group*” have the same meaning as in section 165 (see section 165A).
#### Sections 184A and 184B: meaning of “qualifying change of ownership”
- (a) “*collateral*” means an amount of money or other property which—
- (i) is provided under the arrangement (or under arrangements of which the arrangement forms part), and
- (ii) is payable to or made available for the benefit of L for the purpose of securing the discharge of the requirement to transfer any or all of the securities back to L, and
- (b) any expression used in this section and in section 263B has the same meaning as in that section.
#### Location of certain intangible assets
#### Effect of election under section 279A
#### Elections under section 279A
### Application of Schedule
##### A1
This Schedule applies only for the purposes of corporation tax.
### Outstanding section 2(2) amounts
##### 1A
- (1) The following steps are to be taken for the purpose of calculating the section 2(2) amounts for a settlement that are outstanding at the end of a tax year (“the relevant tax year”).
- *Step 1*Find the section 2(2) amount for the settlement for the relevant tax year and earlier tax years, as reduced under section 87A as it applies for the relevant tax year and earlier tax years.
- *Step 2*This Step applies if, by virtue of the matching of the section 2(2) amount for the settlement for a tax year (“the applicable year”) with a capital payment, chargeable gains are treated under section 87 or 89(2) as accruing in the relevant tax year to a beneficiary who is not chargeable to tax for that year.Increase the section 2(2) amount for the applicable year (found under Step 1) by the amount of the chargeable gains.
- (2) For the purposes of Step 1 of sub-paragraph (1) take into account the effect of section 90 in relation to any transfer of settled property from or to the trustees of the settlement made in or before the relevant tax year.
- (3) For the purposes of this Schedule a beneficiary is “chargeable to tax” for a tax year if the beneficiary is resident or ordinarily resident in the United Kingdom in that year.
### Attribution of gains: remittance basis
##### 8AA
Section 87B (remittance basis) applies in relation to chargeable gains treated under paragraph 8 as accruing as it applies in relation to chargeable gains treated under section 87 as accruing.
##### 116A
- (1) Section 116 applies in accordance with the following assumptions if—
- (a) a holding that is a relevant holding for the purposes of section 490 of CTA 2009 (holdings in OEICs, unit trusts and offshore funds treated as creditor relationship rights) is held by a company both at the end of one accounting period and at the beginning of the next, and
- (b) that section applies to the holding for one of those periods but not for the other.
- (2) The assumptions in subsections (3) and (4) apply for the purposes of this Act if the accounting period for which section 490 of CTA 2009 applies to the relevant holding is the first of those periods.
- (3) The relevant holding is assumed to have ceased to be a relevant holding for the second of those periods as a result of a transaction such as is mentioned in section 116(1) (“the reorganisation transaction”) occurring at the beginning of that period.
- (4) In relation to the reorganisation transaction within subsection (3), for the purposes of section 116—
- (a) the relevant holding immediately before the beginning of the second of those periods is assumed to be the old asset, and
- (b) the relevant holding immediately after the beginning of that period is assumed to be the new asset.
- (5) The assumptions in subsections (6) and (8) apply for the purposes of this Act if the accounting period for which section 490 of CTA 2009 applies to the relevant holding is the second of those periods.
- (6) The holding is assumed to have become a relevant holding for the second of those periods as a result of the occurrence at the end of first period of a transaction such as is mentioned in section 116(1).
- (7) But subsection (6) does not apply if the first of those periods is a period at the end of which a disposal of the relevant holding is treated as having occurred under section 212 (annual deemed disposal of holdings of unit trusts etc by insurance companies).
- (8) In relation to the reorganisation transaction within subsection (6), for the purposes of section 116—
- (a) the relevant holding immediately before the beginning of the second of those periods is assumed to be the old asset, and
- (b) the relevant holding immediately after the beginning of that period is assumed to be the new asset.
##### 116B
- (1) If at any time section 521B of CTA 2009 (application of Part 5 of that Act to certain shares as rights under a creditor relationship) begins or ceases to apply in the case of a share held by the investing company it is treated for the purposes of this Act—
- (a) as having disposed of the share immediately before that time for consideration of an amount equal to the notional carrying value of the share at that time, and
- (b) as having immediately reacquired it for consideration of the same amount.
- (2) In this section—
- “*notional carrying value*” has the same meaning as in subsection (2) of section 521F of CTA 2009 (see subsection (3) of that section),
- “*investing company*” has the same meaning as it has for the purposes of Chapter 6A of Part 6 of that Act (shares accounted for as liabilities) (see section 521A(3) of that Act).
##### 151E
- (1) The Treasury may by regulations make provision for or in connection with bringing into account in prescribed circumstances for the purposes of this Act amounts to which section 328(1) of CTA 2009 does not apply because of section 328(3) or (4) of that Act.
- (2) The regulations may—
- (a) make different provision for different cases, and
- (b) make provision subject to an election or to other prescribed conditions.
##### 151F
- (1) This section applies if under arrangements to which section 503 (purchase and resale arrangements), 504 (diminishing shared ownership arrangements) or 507 (investment bond arrangements) of CTA 2009 applies an asset is sold by one party to the arrangements to the other party.
- (2) The alternative finance return (as defined in section 511, 512 or 513(3) of that Act, as the case may be) is excluded in determining for the purposes of this Act the consideration for the sale and purchase of the asset.
- (3) This section does not affect the operation of any provision of this Act or the Tax Acts which provides that the consideration for a sale or purchase is to be taken for any purpose to be an amount other than the actual consideration.
##### 151G
- (1) If the Treasury make regulations under section 533 of CTA 2009 (power to change conditions for non-qualifying shares) adding, varying or removing such a condition as is mentioned in subsection (1) of that section, they may also by regulations amend this Act so as to make provision for or in connection with taxation in the case of any asset or transaction that is or was mentioned in the condition.
- (2) Regulations under this section may—
- (a) make different provision for different cases, and
- (b) make incidental, supplemental, consequential and transitional provisions and savings.
- (3) Regulations made under subsection (2)(b) may, in particular, include provision amending any enactment or any instrument made under an enactment.
##### 156ZA
- (1) This section applies if a company is entitled to relief under Chapter 7 of Part 8 of CTA 2009 (roll-over relief in case of realisation and reinvestment) as a result of—
- (a) section 898 of that Act (roll-over relief where pre-FA 2002 assets disposed of on or after 1 April 2002), or
- (b) section 899 of that Act (roll-over relief where degrouping charge on pre-FA 2002 asset arises on or after 1 April 2002).
- (2) The company is treated for the purposes of this Act as if the consideration for the disposal of the old asset were reduced by the amount available for relief.
- (3) Subsection (2) does not affect the treatment for any purpose of the Taxes Acts of the other party to any transaction involved in the disposal of the old asset or the expenditure on other assets.
- (4) In this section—
- “*the old asset*” has the same meaning as in Chapter 7 of Part 8 of CTA 2009 (see section 754(2)), and
- “*the Taxes Acts*” means the enactments relating to income tax, corporation tax or chargeable gains.
##### 156ZB
- (1) This section applies if there is a disposal on or after 1 April 2002 of an asset that is both—
- (a) an asset of a class specified in section 155, and
- (b) an intangible fixed asset for the purposes of Part 8 of CTA 2009.
- (2) The period specified in section 152(3)—
- (a) does not include any period beginning on or after 1 April 2002, and
- (b) may not be extended so as to include any such period.
- (3) Classes 4 to 7A in section 155 do not apply for the purposes of corporation tax as respects the acquisition of new assets that are chargeable intangible assets for the purposes of Part 8 of CTA 2009 (see section 741 of that Act).
- (4) In the case of an acquisition before 22 March 2005, subsection (3) applies as if it referred to Classes 4 to 7, instead of Classes 4 to 7A.
#### Information.
#### Treating trade loss etc as CGT loss
#### Provisions supplementary to section 279A
#### Consideration payable by instalments.
##### 286A
Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of companies) applies for the purposes of—
- (a) this Act (so far as relating to capital gains tax), and
- (b) any other enactment relating to capital gains tax,
as it applies for the purposes of the Corporation Tax Acts.
##### 225B
- (1) Where an individual—
- (a) ceases to live with his spouse or civil partner in a dwelling-house or part of a dwelling-house which is their only or main residence, and
- (b) subsequently disposes of, or of an interest in, the dwelling-house or part to the spouse or civil partner,
then, if conditions A to C are met, sections 222 to 224 shall apply as if the dwelling-house or part continued to be the individual’s only or main residence until the disposal.
- (2) Condition A is that the disposal mentioned in subsection (1)(b) is pursuant to—
- (a) an agreement between the individual and his spouse or civil partner made in contemplation of or otherwise in connection with the dissolution or annulment of the marriage or civil partnership, their judicial separation or the making of a separation order in respect of them, or their separation in other circumstances such that the separation is likely to be permanent, or
- (b) an order of a court—
- (i) made on granting an order or a decree of divorce or nullity of marriage, for the dissolution or annulment of the civil partnership, or for judicial separation,
- (ii) made in connection with the dissolution or annulment of the marriage or civil partnership or the parties’ judicial separation and which is made at any time after the granting of such an order or decree,
- (iii) made at any time under section 22A, 23, 23A, 24 or 24A of the Matrimonial Causes Act 1973,
- (iv) made at any time under article 25 or 26 of the Matrimonial Causes (Northern Ireland) Order 1978,
- (v) made under section 8 of the Family Law (Scotland) Act 1985, including incidental orders made by virtue of section 14 of that Act, or
- (vi) made at any time under any provision of Schedule 5 to the Civil Partnership Act 2004 that corresponds to any of the provisions mentioned in paragraphs (iii) and (iv).
- (3) Condition B is that in the period between the individual ceasing to reside in the dwelling-house or part of the dwelling-house and the disposal to the spouse or civil partner, the dwelling-house or part continues to be the only or main residence of the spouse or civil partner.
- (4) Condition C is that the individual has not given notice under section 222(5) that another dwelling-house or part of a dwelling-house is to be treated as the individual’s main residence for any part of that period.
- (5) Section 223 (as applied by this section) shall apply only on the making of a claim by the individual.
##### 225C
- (1) This section applies where—
- (a) an individual disposes of, or of an interest in, a dwelling-house or a part of a dwelling-house which is the individual’s only or main residence (“the initial disposal”),
- (b) the individual does so as a consequence of a change to the situation of the individual’s place of work or that of a co-owner of the dwelling-house or the interest, being a change that is required by the employer of the individual or the co-owner, and
- (c) the initial disposal is under a home purchase agreement.
- (2) If—
- (a) under the terms of the agreement the individual receives, within three years of the initial disposal, a share of any profit made by the purchaser upon the purchaser’s disposal of, or of an interest in, the dwelling-house or part of the dwelling-house, and
- (b) the receipt of that sum would be treated (apart from this section) as a disposal falling within section 22 (disposal where capital sums derived from assets),
that receipt shall be treated for the purposes of this Act as a gain attributable to the initial disposal but accruing to the individual at the time the sum is received.
- (3) In this section—
- “home purchase agreement” means an agreement—made with the employer or a person operating under an agreement with the employer (“the purchaser”),which includes a term entitling the individual to receive a share of any such profit as is mentioned in subsection (2)(a);
- “co-owner”, in relation to any individual (“A”), means another individual who holds an interest jointly or in common with A, whether or not the interests of the co-owners are equal.
##### 239ZA
- (1) Any gain accruing to trustees on the disposal of an asset comprised in the settled property of an employee trust shall not be a chargeable gain where the disposal is—
- (a) a disposal to a beneficiary, or
- (b) a deemed disposal under section 71(1),
if the conditions in subsection (2) are satisfied.
- (2) The conditions are that—
- (a) an amount that is equal to or exceeds the market value of the asset is chargeable to income tax as employment income within the meaning of section 7 of ITEPA 2003 (meaning of “employment income” etc);
- (b) neither the beneficiary nor (if different) the person who is liable for the income tax is an excluded person;
- (c) no actual consideration (as opposed to consideration deemed to be given by any enactment relating to the taxation of chargeable gains) is given directly or indirectly to the trustees for the asset; and
- (d) Schedule 7D does not to any extent prevent the gain being a chargeable gain.
- (3) The following are excluded persons—
- (a) a participator in a company, shares in or securities of which are comprised in the settled property;
- (b) a participator in a close company that has provided any property that has become comprised in the settled property;
- (c) a person who was a participator in a company within paragraph (a) or (b) at any time during the 10 years before the shares, securities or other property concerned became comprised in the settled property;
- (d) a person connected with a person within any of paragraphs (a) to (c).
- (4) For the purposes of subsection (3)—
- (a) “participator” has the same meaning as in section 239 and shall, in the case of a company which is not a close company, be construed as a person who would be a participator in the company if it were a close company, but
- (b) a person is not a participator unless either—
- (i) that person is entitled to, or entitled to rights enabling the acquisition of, 5% or more of the share capital of the company or any class of shares in the company, or
- (ii) that person would be entitled to 5% or more of the company’s assets on winding-up.
- (5) In determining whether a person is connected with another for the purposes of this section, section 286 shall apply as if subsection (8) of that section also mentioned uncle, aunt, nephew and niece.
- (6) In this section—
- “beneficiary” means a person within paragraph (a) or (b) of section 86(1) of the Inheritance Tax Act 1984 (trusts for benefit of employees);
- “close company” includes a company which, if resident in the United Kingdom, would be a close company as defined in section 288;
- “employee trust” means a settlement of property to which section 86 of the Inheritance Tax Act 1984 applies or would apply but for subsection (3) of that section;
- “market value” means the market value for the purposes of capital gains tax (as to which see section 272).
#### Recovery of tax from donee.
#### Variation of will or intestacy, etc: identification of settlor
#### Sub-fund settlements
##### 103A
- (1) This Act applies in relation to a relevant offshore fund as if—
- (a) the fund were a company, and
- (b) the rights of the participants in the fund were shares in the company.
- (2) An offshore fund is a relevant offshore fund if—
- (a) it is not constituted by a company, and
- (b) it is not a unit trust scheme (see section 99).
- (3) In this section “offshore fund” and “*participant*”, in relation to a fund, have the meanings given in section 40A of the Finance Act 2008.
##### 171B
- (1) This section applies where an election is made under section 171A.
- (2) The effect of the election is that the chargeable gain or allowable loss, or such amount of it as is specified in the election, is treated as accruing not to company A but to company B.
- (3) The gain or loss treated as accruing to company B is to be taken to accrue at the time that, had the election not been made, it would have accrued to company A.
- (4) Where company B is not resident in the United Kingdom, the gain or loss treated as accruing to it is to be taken to accrue in respect of a chargeable asset held by it.
- (5) For this purpose an asset is a “*chargeable asset*” in relation to a company at any time if any gain accruing to the company on a disposal of the asset by the company at that time would be a chargeable gain and would by virtue of section 10B form part of its chargeable profits for corporation tax purposes.
- (6) Any payment made by company A to company B or by company B to company A, in pursuance of an agreement between them in connection with the election—
- (a) is not to be taken into account in computing profits or losses of either company for corporation tax purposes, and
- (b) is not for any purposes of the Corporation Tax Acts to be regarded as a distribution,
provided it does not exceed the amount of the chargeable gain or allowable loss that is treated, as a result of the election, as accruing to company B.
##### 171C
- (1) This section applies where —
- (a) an election is made under section 171A in relation to a gain or loss, and
- (b) company B is an insurance company.
- (2) For the purposes of section 171A(1)(c), section 440(3) of the Taxes Act (disposals of certain assets by and to insurance companies to fall outside the rule in section 171) is to be disregarded.
- (3) Subsection (2) does not apply if—
- (a) company A is an insurance company, and
- (b) the gain or loss arose in respect of the disposal of an asset that, immediately before the disposal, was part of that company's long-term insurance fund.
- (4) The chargeable gain or allowable loss treated as accruing to company B as a result of the election is to be treated as arising in respect of an asset that is not part of company B's long-term insurance fund.
- (5) In this section “*insurance company*” and “*long-term insurance fund*” have the same meaning as in Chapter 1 of Part 12 of the Taxes Act (see section 431(2) of that Act).
##### 195A
- (1) Sections 195B to 195E apply for the purposes of corporation tax on chargeable gains.
- (2) In those sections—
- “*licence-consideration swap*” means a case where conditions A, B, C and D are met;
- “*mixed-consideration swap*” means a case where conditions A, B, C and E are met.
- (3) Condition A is that a company (“company A”) disposes of one or more UK licences to another company (“company B”), by way of a bargain at arm's length (“disposal A”).
- (4) Condition B is that company B disposes of one or more UK licences to company A, by way of a bargain at arm's length (“disposal B”).
- (5) Condition C is that either or both of the following paragraphs applies—
- (a) the licence, or at least one of the licences, comprised in disposal A relates to a developed area;
- (b) the licence, or at least one of the licences, comprised in disposal B relates to a developed area.
- (6) Condition D is that both—
- (a) disposal A is the only consideration given for disposal B, and
- (b) disposal B is the only consideration given for disposal A.
- (7) Condition E is that either—
- (a) disposal A is the only consideration given for disposal B, or
- (b) disposal B is the only consideration given for disposal A,
(and accordingly one of the disposals is part of the consideration given for the other disposal).
- (8) In this section and sections 195B to 196 a reference to disposal of a UK licence includes—
- (a) a disposal of an interest in a UK licence, and
- (b) a disposal of a UK licence, or an interest in a UK licence, only so far as the licence relates to part of the licensed area.
##### 195B
- (1) This section applies to a licence-consideration swap.
- (2) Each company participating in the swap is to be treated as follows.
- (3) As regards the licence, or each licence, which the company disposes of, the company is to be treated as if it had disposed of that licence for a consideration of such amount as to secure that on the disposal neither a gain nor a loss accrues to the company.
- (4) In a case where the company acquires only one licence, the company is to be treated as if it had acquired the licence for a consideration of the same amount as the deemed disposal consideration.
- (5) In a case where the company acquires two or more licences, as regards each licence acquired, the company is to be treated as if it had acquired that licence for a consideration of—
$$DDC×ATA$where—DDC is the deemed disposal consideration,A is the value of the licence acquired, and TA is total value of all the licences acquired.$
- (6) In this section “*deemed disposal consideration*”, in relation to a company participating in the swap, means—
- (a) the amount of the consideration for which the company is, under subsection (3), treated as having disposed of its licence (if the company disposes of only one licence), or
- (b) the aggregate of all such amounts (if the company disposes of two or more licences).
##### 195C
- (1) This section applies to a mixed-consideration swap if—
- (a) the no gain/no loss loss amount (“N”) of the company that receives the mixed consideration (“company R”), exceeds
- (b) the amount of non-licence consideration (“C”) which company R receives.
- (2) In a case where company R acquires only one licence, company R is to be treated as if it had acquired the licence for a consideration of—
$N-C$
- (3) In a case where company R acquires two or more licences, as regards each licence acquired, company R is to be treated as if it had acquired the licence for a consideration of—
$$(N-C)×ATA$where—A is the value of the licence acquired, and TA is total value of all the licences acquired.$
- (4) The disposal by company R of a licence under the swap is to be taken to be one on which neither a gain nor a loss accrues.
- (5) But (despite subsection (4)), the disposal by company R is not a no gain/no loss disposal for the purposes of section 56.
- (6) For the purposes of the application of sections 53 and 54, any enactment is to be disregarded insofar as it provides that, if the other company which acquires a licence under the swap (“company G”) subsequently disposes of the licence, company R's acquisition of the licence is to be treated as company G's acquisition of it.
- (7) In this section the reference to the no gain/no loss amount of company R is a reference to—
- (a) in a case where company R disposes of only one licence, company R's no gain/no loss amount in relation to that disposal, or
- (b) in a case where company R disposes of two or more licences, the aggregate of company R's no gain/no loss amounts in relation to all of those disposals.
##### 195D
- (1) This section applies to a mixed-consideration swap if—
- (a) the no gain/no loss amount (“N”) of the company that receives the mixed consideration (“company R”) does not exceed
- (b) the amount of non-licence consideration (“C”) which company R receives.
- (2) As regards the licence, or each licence, which company R acquires, company R is to be treated as if it had acquired the licence for nil consideration.
- (3) In a case where company R disposes of only one licence, company R is to be treated as if, on the disposal of the licence, there had arisen a gain of—
$C-N$
- (4) In a case where company R disposes of two or more licences, as regards each licence disposed of, company R is to be treated as if, on the disposal of the licence, there had arisen a gain of—
$$(C-N)×DTD$where—D is the value of the licence disposed of, and TD is total value of all the licences disposed of.$
##### 195E
- (1) This section applies to a mixed-consideration swap—
- (a) whatever the no gain/no loss amount (“N”) of the company that gives the mixed consideration (“company G”), and
- (b) whatever the amount of the non-licence consideration (“C”) which company G gives.
- (2) In a case where company G acquires only one licence, company G is to be treated as if it had acquired the licence for a consideration of—
$N+C$
- (3) In a case where company G acquires two or more licences, as regards each licence acquired, company G is to be treated as if it had acquired the licence for a consideration of—
$$(N+C)×ATA$where—A is the value of the licence acquired, and TA is total value of all the licences acquired.$
- (4) The disposal by company G of a licence under the swap is to be taken to be one on which neither a gain nor a loss accrues.
- (5) But (despite subsection (4)), the disposal by company G is not a no gain/no loss disposal for the purposes of section 56.
- (6) For the purposes of the application of sections 53 and 54, any enactment is to be disregarded insofar as it provides that, if the other company which acquires a licence under the swap (“company R”) subsequently disposes of the licence, company G's acquisition of the licence is to be treated as company R's acquisition of it.
- (7) In this section the reference to the no gain/no loss amount of company G is a reference to—
- (a) in a case where company G disposes of only one licence, company G's no gain/no loss amount in relation to that disposal, or
- (b) in a case where company G disposes of two or more licences, the aggregate of company G's no gain/no loss amounts in relation to all of those disposals.
##### 198A
- (1) This section applies if a person (“P”) makes a disposal and acquisition which—
- (a) is a ring fence reinvestment, and
- (b) qualifies for roll-over relief.
- (2) P may make a claim under this section in relation to the disposal and acquisition.
- (3) If P makes a claim under this section—
- (a) section 152 does not apply to any of the disposal consideration, and
- (b) any gain accruing to P on the disposal is not a chargeable gain.
- (4) In this section “*disposal consideration*” means the whole of the consideration obtained on the disposal made by P.
##### 198B
- (1) This section applies if a person (“P”) makes a disposal and acquisition which—
- (a) is a ring fence reinvestment, and
- (b) qualifies for section 153 relief.
- (2) P may make a claim under this section in relation to the disposal and acquisition.
- (3) If P makes a claim under this section—
- (a) section 153(1)(a) applies in relation to P and the disposal, but
- (b) section 153(1)(b) does not apply to P and the acquisition.
##### 198C
- (1) This section applies where a person (“P”) carrying on a ring fence trade who for a consideration disposes of, or of an interest in, any assets (“the old assets”) declares, in P's return for the chargeable period in which the disposal takes place—
- (a) that the whole or any specified part of the consideration will be applied in the acquisition of, or of an interest in, other assets (“the new assets”),
- (b) that the acquisition will take place as mentioned in section 152(3),
- (c) that the disposal and acquisition will be a ring fence reinvestment,
- (d) that P intends to make a claim under section 198A or 198B in relation to the disposal and acquisition, and
- (e) that P has not made, and will not make, a declaration under section 153A in relation to the disposal and acquisition.
- (2) Until the declaration ceases to have effect, section 198A or 198B applies as if the acquisition had taken place and the person had made a claim under that section.
- (3) The declaration ceases to have effect as follows—
- (a) if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim made under section 198A or 198B, on the day on which it is so withdrawn or superseded, and
- (b) if and to the extent that it is not so withdrawn or superseded, on the relevant day.
- (4) On the declaration ceasing to have effect in whole or in part, all necessary adjustments—
- (a) are to be made by making or amending assessments or by repayment or discharge of tax, and
- (b) are to be so made despite any limitation on the time within which assessments or amendments may be made.
- (5) If—
- (a) P makes a declaration under this section, and
- (b) the disposal and acquisition is not a ring fence reinvestment, but qualifies for roll-over relief or section 153 relief,
on P making a claim, the declaration is to have effect as also a declaration under section 153A.
- (6) In this section “*the relevant day*” means—
- (a) in relation to capital gains tax, the third anniversary of the 31st January next following the year of assessment in which the disposal of, or of the interest in, the old assets took place, and
- (b) in relation to corporation tax, the fourth anniversary of the last day of the accounting period in which that disposal took place.
- (7) Section 152(6), (10) and (11) apply for the purposes of this section as they apply for the purposes of section 152.
##### 198D
- (1) If P makes a claim under section 198A or 198B, no other relevant claim may be made in respect of the relevant acquisition.
- (2) P may make a claim under section 198A or 198B (“the new claim”), if P has previously made a claim under section 152 or 153 (“the previous claim”) in respect of the relevant acquisition.
- (3) But P may make the new claim only if the previous claim is withdrawn at or before the time the new claim is made.
- (4) If the new claim is made in accordance with subsections (2) and (3), all necessary adjustments—
- (a) are to be made by making or amending assessments or by repayment or discharge of tax, and
- (b) are to be so made despite any limitation on the time within which assessments or amendments may be made.
- (5) In this section—
- “*relevant acquisition*” means the acquisition of the new assets that is comprised in the disposal and acquisition to which a claim under section 198A or 198B or declaration under section 198C relates;
- “*relevant claim*” means a claim under section 152, 153, 198A or 198B.
##### 198E
- (1) This section applies for the purposes of sections 198A to 198G.
- (2) A disposal and acquisition is a ring fence reinvestment if—
- (a) the disposal was—
- (i) a material disposal, or
- (ii) a disposal of a UK licence which relates to an undeveloped area,
- (b) the old assets were used only for the purposes of P's ring fence trade,
- (c) the new assets are taken into use, and used only, for the purposes of one or more of the following trades—
- (i) P's ring fence trade;
- (ii) if P is a member of a group of companies (within the meaning given in section 170), a ring fence trade of another member of that group, and
- (d) the new assets are oil assets.
- (3) If the disposal consists of—
- (a) disposal of a licence to which section 195D(3) applies, or
- (b) disposal of two or more licences to which section 195D(4) applies,
the consideration for the disposal is to be taken to be the whole of the non-licence consideration obtained on the disposal (which is referred to as “*C*” in section 195D).
- (4) Accordingly, in sections 198A to 198G (including section 198A(4)), any reference to the consideration obtained on the disposal has effect subject to subsection (3).
- (5) Each of the following is an “*oil asset*” for the purposes of this section—
- (a) an interest in oil to be won from an oil field,
- (b) an asset used in connection with an oil field,
- (c) a structure which is to be placed on the seabed of the United Kingdom continental shelf,
- (d) an asset used wholly in the winning of oil, or in the measuring of oil won, in the United Kingdom otherwise than from an oil field,
- (e) an asset used for the initial treatment or storage of oil in the United Kingdom,
- (f) an asset used for the transportation of oil from an oil field to the United Kingdom, and
- (g) a UK licence which relates to an undeveloped area.
- (6) Section 12 of the Oil Taxation Act 1975 (interpretation of Part 1 of that Act) applies for the interpretation of subsection (5)(a) to (f).
- (7) Expressions used in this section and in section 152 have the same meanings in this section as in section 152.
- (8) In this section a reference to a UK licence which relates to an undeveloped area has the same meaning as in section 194 (see section 196).
- (9) In this section—
- “*material disposal*” has the meaning given in section 197;
- “*ring fence trade*” has the meaning given in section 198.
##### 198F
- (1) This section applies for the purposes of sections 198A and 198B and section 198G.
- (2) A disposal and acquisition qualifies for roll-over relief if—
- (a) the consideration for the disposal is applied in an acquisition as mentioned in section 152(1), and
- (b) section 152(1)(a) and (b) would apply to the disposal and acquisition if the appropriate claim were made.
- (3) Subsections (4) to (6) apply in deciding whether a disposal and acquisition is one that qualifies for roll-over relief.
- (4) Section 152(8) is to be disregarded.
- (5) Section 198A is to be disregarded.
- (6) Subject to subsections (4) to (5), all the circumstances are to be taken into account, including section 153(1) and section 198(1) and (2).
##### 198G
- (1) This section applies for the purposes of sections 198B and 198C.
- (2) A disposal and acquisition qualifies for section 153 relief if—
- (a) section 153(1) applies to part of the amount or value of the consideration for the disposal,
- (b) section 153(1)(a) and (b) would apply to the disposal and acquisition if the appropriate claim were made, and
- (c) the disposal and acquisition would qualify for roll-over relief but for the disapplication of section 152(1) by section 153(1).
- (3) Subsections (4) to (6) apply in deciding whether a disposal and acquisition is one that qualifies for section 153 relief.
- (4) Section 153(2) has effect subject to section 198F(4) and (5).
- (5) Section 198B is to be disregarded.
- (6) Subject to subsections (4) and (5), all the circumstances are to be taken into account, including section 198(1).
##### 263CA
- (1) This section applies where, in the case of any stock lending arrangement—
- (a) the borrower (B) becomes insolvent after the lender (L) has transferred the securities,
- (b) as a result of the insolvency, the requirement for B to make a transfer back to L will not be complied with as regards some or all of the securities,
- (c) collateral is used (whether directly or indirectly) to enable L to acquire securities (“replacement securities”) of the same description as the securities which will not be transferred back, and
- (d) the replacement securities are acquired before the end of the period of 30 days beginning with the day on which B becomes insolvent (“the insolvency date”).
- (2) In accordance with section 263B(2), the transfer of the securities under the arrangement is not to be regarded as a disposal by L for the purposes of this Act (but this is subject to subsection (5)).
- (3) B is to be treated for the purposes of this Act as having acquired the securities which will not be transferred back to L; and that acquisition is to be treated—
- (a) as being made on the insolvency date, and
- (b) as being for a consideration equal to their market value on that date.
- (4) The acquisition of the replacement securities is to be treated, as regards L, as if it were a transfer back of securities in accordance with the arrangement (so that, in accordance with section 263B(2), that acquisition is not regarded as an acquisition by L for the purposes of this Act).
- (5) If the number of replacement securities is less than the number of securities which B is treated as having acquired, L is to be treated for the purposes of this Act as having made a disposal, at the insolvency date, of the difference (“the deemed disposal”).
- (6) The consideration for the deemed disposal is—
- (a) where all the collateral is used to enable L to acquire replacement securities, nil, and
- (b) where not all the collateral is so used, the difference between—
- (i) the market value (at the insolvency date) of the number of securities which could have been acquired using the collateral, and
- (ii) the market value (at that date) of the number of securities which were in fact so acquired.
- (7) But if L at any time receives any amount (whether arising out of B's insolvency or otherwise) in respect of B's liability to L in respect of the securities which are treated under subsection (5) as having been disposed of by L that amount is to be treated as a chargeable gain accruing at that time to L.
- (8) The liability mentioned in subsection (7) is not to be treated as giving rise to a relevant non-lending relationship for the purposes of Part 6 of CTA 2009 (relationships treated as loan relationships etc).
- (9) For the purposes of this section, B becomes insolvent—
- (a) if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,
- (b) if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,
- (c) on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,
- (d) if an individual voluntary arrangement takes effect under Part 8 of that Act,
- (e) on the presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),
- (f) if a compromise or arrangement takes effect under Part 26 of the Companies Act 2006,
- (g) if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,
- (h) if a bank administration order takes effect under Part 3 of that Act, or
- (i) on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.
- (10) In this section—
- (a) “*collateral*” means an amount of money or other property which—
- (i) is provided under the arrangement (or under arrangements of which the arrangement forms part), and
- (ii) is payable to or made available for the benefit of L for the purpose of securing the discharge of the requirement to transfer any or all of the securities back to L, and
- (b) any expression used in this section and in section 263B has the same meaning as in that section.
#### Section 275A: supplementary provisions
2010-03-06
Taxation of Chargeable Gains Act 1992
2010-01-01
Taxation of Chargeable Gains Act 1992
2009-12-01
Taxation of Chargeable Gains Act 1992
2009-10-01
Taxation of Chargeable Gains Act 1992
2009-08-13
Taxation of Chargeable Gains Act 1992
2009-07-21
Taxation of Chargeable Gains Act 1992
2009-04-22
Taxation of Chargeable Gains Act 1992
2009-04-06
Taxation of Chargeable Gains Act 1992
2009-04-01
Taxation of Chargeable Gains Act 1992
2009-02-21
Taxation of Chargeable Gains Act 1992
2009-02-03
Taxation of Chargeable Gains Act 1992
2009-01-01
Taxation of Chargeable Gains Act 1992
2008-12-01
Taxation of Chargeable Gains Act 1992
2008-09-08
Taxation of Chargeable Gains Act 1992
2008-07-22
Taxation of Chargeable Gains Act 1992
2008-07-21
Taxation of Chargeable Gains Act 1992
2008-07-08
Taxation of Chargeable Gains Act 1992
original version
Text at this date