(1) In the case of purchase and resale arrangements, so much of the second purchase price as is specified under the following provisions of this section is alternative finance return for the purposes of this Chapter.
(2) If under the arrangements the whole of the second purchase price is paid on one day, the alternative finance return equals the amount by which the second purchase price exceeds the first purchase price.
(3) If under the arrangements the second purchase price is paid by instalments, the alternative finance return in each instalment equals the appropriate amount.
(4) The appropriate amount is an amount equal to the interest which would have been included in the instalment on the assumptions in subsection (5).
(5) The assumptions are that—
(a) interest is payable on a loan by the first purchaser to the second purchaser of an amount equal to the first purchase price,
(b) the total interest payable on the loan is equal to the amount by which the second purchase price exceeds the first purchase price,
(c) the instalment is a part repayment of the principal of the loan with interest, and
(d) the loan is made on arm's length terms and accounted for under generally accepted accounting practice.
(6) In this section expressions used in section 151J have the same meaning as in that section.
151Q Purchase and resale arrangements where return in foreign currency
(1) If, in the case of purchase and resale arrangements, alternative finance return is paid in a currency other than sterling—
(a) by or to a person other than a company, and
(b) otherwise than for the purposes of a trade, profession or vocation or a property business,
subsections (2) and (3) apply as respects that person.
(2) The amount of the excess referred to in section 151P(2) and (5)(b) and the appropriate amount for the purposes of section 151P(3) and (4) are to be calculated in that other currency.
(3) The amount of each payment of alternative finance return is to be translated into sterling at a spot rate of exchange for the day on which the payment is made.
(1) In the case of diminishing shared ownership arrangements, payments by the customer under the arrangements are alternative finance return for the purposes of this Chapter, except so far as subsection (2) or (3) applies to them.
(2) This subsection applies to the payments so far as they amount to payments of the kind described in section 151K(1)(c) or 151KA(1)(d) or (2)(c) (payments to be made by the customer to the financier, amounting to the consideration paid for the acquisition of the financier’s beneficial interest).
(3) This subsection applies to the payments so far as they amount to payments in respect of any arrangement fee or legal or other expenses which the customer is required under the arrangements to pay.
(4) In this section “the customer” has the same meaning as in section 151K or 151KA.
(1) In the case of deposit arrangements, amounts paid or credited as mentioned in section 151L(1)(c) by a financial institution under the arrangements (payments to depositor out of profits resulting from use of money) are alternative finance return for the purposes of this Chapter.
(2) In the case of profit share agency arrangements, amounts paid or credited by a financial institution in accordance with such an entitlement as is mentioned in section 151M(1)(d) (principal's entitlement to profits under the arrangements) are alternative finance return for the purposes of this Chapter.
(3) In the case of investment bond arrangements, the additional payments under the arrangements are alternative finance return for the purposes of this Chapter.
(4) In this section “additional payments” has the same meaning as in section 151N (see subsection (1)(d)(iii) of that section).
151T Investment bond arrangements are qualifying corporate bonds
(1) For the purposes of section 117, investment bond arrangements are a corporate bond, issued on the date on which the arrangements are entered into, if each of conditions A to D is met.
(2) Condition A is that the capital is expressed in sterling.
(3) Condition B is that the arrangements do not include provision for the redemption payment to be in a currency other than sterling.
(4) Condition C is that entitlement to the redemption payment is not capable of conversion (directly or indirectly) into an entitlement to the issue of securities apart from other arrangements to which section 151N applies.
(5) Condition D is that the additional payments are not determined wholly or partly by reference to the value of the bond assets.
(6) Section 117(2) applies for the purposes of this section as it applies for the purposes of section 117(1).
(7) Expressions used in this section have the same meaning as in section 151N.
(1) This section applies for the purposes of this Act and any other enactment about capital gains tax and irrespective of the position for other purposes.
(2) The bond-holder under investment bond arrangements is not treated as having a legal or beneficial interest in the bond assets.
(3) The bond-issuer under such arrangements is not treated as a trustee of the bond assets.
(4) Gains accruing to the bond-issuer in connection with the bond assets are gains of the bond-issuer and not of the bond-holder (and do not arise to the bond-issuer in a fiduciary or representative capacity).
(5) Payments made by the bond-issuer by way of redemption payment or additional payment are not made in a fiduciary or representative capacity.
(6) The bond-holder is not entitled to relief for capital expenditure in connection with the bond assets.
(7) Expressions used in this section have the same meaning as in section 151N.
(1) Investment bond arrangements are securities for the purposes of this Act and any other enactment about capital gains tax.
(2) For those purposes—
(a) a reference in an enactment to redemption is to be taken as a reference to making the redemption payment, and
(b) a reference in an enactment to interest is to be taken as a reference to alternative finance return.
(3) In subsection (2) “the redemption payment” has the same meaning as in section 151N (see subsection (1)(d)(ii) of that section).
151W Investment bond arrangements not unit trust scheme or offshore fund
Investment bond arrangements are not—
(a) a unit trust scheme for the purposes of this Act, or
(b) an offshore fund for the purposes of section 354 of TIOPA 2010 so far as relating to capital gains tax.
151X Exclusion of some alternative finance return from sale consideration
(1) If under purchase and resale arrangements an asset is sold by one party to the arrangements to the other party, the alternative finance return is excluded in determining the consideration for the sale and purchase of the asset for the purposes of this Act so far as it applies for capital gains tax (apart from section 151J).
(2) If under diminishing shared ownership arrangements an asset is sold by one party to the arrangements to the other party, the alternative finance return is excluded in determining the consideration for the sale and purchase of the asset for the purposes of this Act so far as it applies for capital gains tax (apart from section 151K or 151KA).
(3) If under investment bond arrangements an asset is sold by one party to the arrangements to the other party, the alternative finance return is excluded in determining the consideration for the sale and purchase of the asset for the purposes of this Act so far as it applies for capital gains tax (apart from section 151N).
(4) Subsections (1) to (3) do not affect the operation of any provision of this Act or the Tax Acts that provides that the consideration for a sale or purchase is taken for any purpose to be an amount other than the actual consideration.
151Y Diminishing shared ownership arrangements : further provision
(1) Diminishing shared ownership arrangements are not treated as a partnership for capital gains tax purposes.
(2) If, under diminishing shared ownership arrangements, the financier grants a lease of the asset to the customer, the grant or termination of the lease is not to be treated as a disposal or acquisition of part of the asset for the purposes of this Act so far as it applies for capital gains tax.
(3) If, under diminishing shared ownership arrangements, the financier is entitled to the asset as a result of the customer breaching an obligation under the arrangements—
(a) the financier’s dealings with the asset for the purpose of enforcing or giving effect to the entitlement, and
(b) the dealings with the asset of any person appointed for that purpose,
are to be treated for the purposes of this Act so far as it applies for capital gains tax as if they were done through the financier, or (as the case may be) the appointed person, as nominee by the customer.
(4) In this section—
“the asset” means the asset in which beneficial interest is acquired and disposed of under the diminishing shared ownership arrangements;
“the customer” and “the financier” have the same meaning as in section 151K or 151KA;
“termination”, in relation to a lease, has the meaning given by section 70YI of CAA 2001.
151Z Diminishing shared ownership arrangements: further provision in respect of refinancing
(1) This section applies in respect of diminishing shared ownership arrangements to which section 151KA applies.
(2) If, under the arrangements, the customer disposes of an asset as mentioned in section 151KA(1)(b), any gain accruing to the customer on the disposal of the asset is to be treated as not having accrued for the purposes of this Act so far as it applies for capital gains tax.
(3) If, under the arrangements, the customer—
(a) disposes of an asset as mentioned in section 151KA(1)(b),
(b) acquires the asset as mentioned in section 151KA(1)(d) and (e) or (2)(c) and (d),
(c) and subsequently disposes of the asset,
the disposal of the asset mentioned in paragraph (a) and the acquisition of the asset mentioned in paragraph (b) (together with any intervening disposals or acquisitions of the asset) are to be treated as not having occurred for the purpose of computing, for the purposes of this Act so far as it applies for capital gains tax, the amount of the gain accruing to the customer on the subsequent disposal of the asset.
(4) In subsections (2) and (3),”the customer” has the same meaning as in section 151KA.
(5) If, under arrangements to which section 151KA(2) applies (“successor arrangements”), the financier under the diminishing shared ownership arrangements that the successor arrangements supersede transfers their interest in a lease forming part of those arrangements to the financier under the successor arrangements, the transfer is not to be treated as involving a disposal or acquisition of the interest for the purposes of this Act so far as it applies for capital gains tax.
(1) If the consideration which a person carrying on a trade obtains for the disposal of, or of his interest in, assets (“the old assets”) used, and used only, for the purposes of the trade throughout the period of ownership is applied by him in acquiring other assets, or an interest in other assets (“the new assets”) which on the acquisition are taken into use, and used only, for the purposes of the trade, and the old assets and new assets are within the classes of assets listed in section 155, then the person carrying on the trade shall, on making a claim as respects the consideration which has been so applied, be treated for the purposes of this Act—
(a) as if the consideration for the disposal of, or of the interest in, the old assets were (if otherwise of a greater amount or value) of such amount as would secure that on the disposal neither a gain nor a loss accrues to him, and
(b) as if the amount or value of the consideration for the acquisition of, or of the interest in, the new assets were reduced by the excess of the amount or value of the actual consideration for the disposal of, or of the interest in, the old assets over the amount of the consideration which he is treated as receiving under paragraph (a) above,
but neither paragraph (a) nor paragraph (b) above shall affect the treatment for the purposes of this Act of the other party to the transaction involving the old assets, or of the other party to the transaction involving the new assets.
(2) Where subsection (1)(a) above applies to exclude a gain which, in consequence of Schedule 2, is not all chargeable gain, the amount of the reduction to be made under subsection (1)(b) above shall be the amount of the chargeable gain, and not the whole amount of the gain.
(3) Subject to subsection (4) below, this section shall only apply if the acquisition of, or of the interest in, the new assets takes place, or an unconditional contract for the acquisition is entered into, in the period beginning 12 months before and ending 3 years after the disposal of, or of the interest in, the old assets, or at such earlier or later time as the Board may by notice allow.
(4) Where an unconditional contract for the acquisition is so entered into, this section may be applied on a provisional basis without waiting to ascertain whether the new assets, or the interest in the new assets, is acquired in pursuance of the contract, and, when that fact is ascertained, all necessary adjustments shall be made by making or amending assessments or by repayment or discharge of tax, and shall be so made notwithstanding any limitation on the time within which assessments or amendments may be made.
(5) This section shall not apply unless the acquisition of, or of the interest in, the new assets was made for the purpose of their use in the trade, and not wholly or partly for the purpose of realising a gain from the disposal of, or of the interest in, the new assets.
(6) If, over the period of ownership or any substantial part of the period of ownership, part of a building or structure is, and part is not, used for the purposes of a trade, this section shall apply as if the part so used, with any land occupied for purposes ancillary to the occupation and use of that part of the building or structure, were a separate asset, and subject to any necessary apportionments of consideration for an acquisition or disposal of, or of an interest in, the building or structure and other land.
(7) If the old assets were not used for the purposes of the trade throughout the period of ownership this section shall apply as if a part of the asset representing its use for the purposes of the trade having regard to the time and extent to which it was, and was not, used for those purposes, were a separate asset which had been wholly used for the purposes of the trade, and this subsection shall apply in relation to that part subject to any necessary apportionment of consideration for an acquisition or disposal of, or of the interest in, the asset.
(8) This section shall apply in relation to a person who, either successively or at the same time, carries on 2 or more trades as if both or all of them were a single trade.
(9) In this section “period of ownership” does not include any period before 31st March 1982.
(10) The provisions of this Act fixing the amount of the consideration deemed to be given for the acquisition or disposal of assets shall be applied before this section is applied.
(11) Without prejudice to section 52(4), where consideration is given for the acquisition or disposal of assets some or part of which are assets in relation to which a claim under this section applies, and some or part of which are not, the consideration shall be apportioned in such manner as is just and reasonable.
(1) Section 152(1) shall not apply if part only of the amount or value of the consideration for the disposal of, or of the interest in, the old assets is applied as described in that subsection, but if all of the amount or value of the consideration except for a part which is less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal of, or of the interest in, the old assets is so applied, then the person carrying on the trade, on making a claim as respects the consideration which has been so applied, shall be treated for the purposes of this Act—
(a) as if the amount of the gain so accruing were reduced to the amount of the said part (and, if not all chargeable gain, with a proportionate reduction in the amount of the chargeable gain), and
(b) as if the amount or value of the consideration for the acquisition of, or of the interest in, the new assets were reduced by the amount by which the gain is reduced (or as the case may be the amount by which the chargeable gain is proportionately reduced) under paragraph (a) of this subsection,
but neither paragraph (a) nor paragraph (b) above shall affect the treatment for the purposes of this Act of the other party to the transaction involving the old assets, or of the other party to the transaction involving the new assets.
(2) Subsections (3) to (11) of 152 shall apply as if this section formed part of that section.
153A Provisional application of sections 152 and 153.
(1) This section applies where a person carrying on a trade who for a consideration disposes of, or of his interest in, any assets (“the old assets”) declares, in his 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”) which on the acquisition will be taken into use, and used only, for the purposes of the trade;
(b) that the acquisition will take place as mentioned in subsection (3) of section 152; and
(c) that the new assets will be within the classes listed in section 155.
(2) Until the declaration ceases to have effect, section 152 or, as the case may be, section 153 shall apply as if the acquisition had taken place and the person had made a claim under that section.
(3) The declaration shall cease 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 152 or 153, 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) shall be made by making or amending assessments or by repayment or discharge of tax; and
(b) shall be so made notwithstanding any limitation on the time within which assessments or amendments may be made.
(5) 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;
(b) in relation to corporation tax, the fourth anniversary of the last day of the accounting period in which that disposal took place.
(6) Subsections (6), (8), (10) and (11) of section 152 shall apply for the purposes of this section as they apply for the purposes of that section.
(1) Sections 152, 153 and 229 shall have effect subject to the provisions of this section in which—
(a) the “held-over gain” means the amount by which, under those sections, and apart from the provisions of this section, any chargeable gain on one asset (“asset No.1”) is reduced, with a corresponding reduction of the expenditure allowable in respect of another asset (“asset No.2”), and
(b) any reference to a gain of any amount being carried forward to any asset is a reference to a reduction of that amount in a chargeable gain coupled with a reduction of the same amount in expenditure allowable in respect of that asset.
(2) If asset No.2 is a depreciating asset, the held-over gain shall not be carried forward, but the claimant shall be treated as if so much of the chargeable gain on asset No.1 as is equal to the held-over gain did not accrue until—
(a) the claimant disposes of asset No.2, or
(b) he ceases to use asset No.2 for the purposes of a trade carried on by him, or
(c) the expiration of a period of 10 years beginning with the acquisition of asset No.2,
whichever event comes first.
(2A) If asset No 2 or shares in a company which holds asset No 2 are transferred as part of the process of a merger to which section 140E applies, the transfer shall be disregarded for the purpose of subsection (2), and for that purpose—
(a) if the transferee holds asset No 2, it shall be treated for the purpose of subsection (2), in relation to asset No 2, as if it were the claimant, or
(b) if the transferee holds shares in the company which holds asset No 2, section 175 shall apply in relation to the group of which the transferee is a member as if it were the same group as any group of which the claimant was a member before the merger.
(2B) If, as part of the process of a merger to which section 140E applies, the transferee becomes a member (whether or not as the principal company) of a group of which the claimant is also a member, for the purposes of subsection (2) section 175 shall apply in relation to the trade carried on by the claimant as if the group of which the transferee is a member were the same group as the group of which the claimant was a member before the merger.
(2C) In subsections (2A) and (2B), “transferor” and “transferee” have the meaning given by section 140E(9).
(2D) Subsections (2A) and (2B) shall apply in relation to the transfer of an asset in circumstances where section 140A applies as they apply in relation to the transfer of an asset on a merger to which section 140E applies, and for that purpose—
(a) references to the merger shall be treated as references to the transfer,
(b) references to section 140E shall be treated as references to section 140A, and
(c) references to the transferor and the transferee shall be treated as references to the transferor and the transferee in relation to the asset.
(3) Where section 229 has effect subject to the provisions of this section, subsection (2)(b) above shall have effect as if it read—
(b) section 232(3) applies as regards asset No.2 (whether or not by virtue of section 232(5)), or
.
(4) If, in the circumstances specified in subsection (5) below, the claimant acquires an asset (“asset No.3”) which is not a depreciating asset, and claims under section 152 or 153—
(a) the gain held-over from asset No.1 shall be carried forward to asset No.3, and
(b) the claim which applies to asset No.2 shall be treated as withdrawn (so that subsection (2) above does not apply).
(5) The circumstances are that asset No.3 is acquired not later than the time when the chargeable gain postponed under subsection (2) above would accrue and, assuming—
(a) that the consideration for asset No.1 was applied in acquiring asset No.3, and
(b) that the time between the disposal of asset No.1 and the acquisition of asset No.3 was within the time limited by section 152(3),
the whole amount of the postponed gain could be carried forward from asset No.1 to asset No.3; and the claim under subsection (4) above shall be accepted as if those assumptions were true.
(6) If part only of the postponed gain could be carried forward from asset No.1 to asset No.3, and the claimant so requires, that and the other part of the postponed gain shall be treated as derived from 2 separate assets, so that, on that claim—
(a) subsection (4) above applies to the first-mentioned part, and
(b) the other part remains subject to subsection (2) above.
(7) For the purposes of this section, an asset is a depreciating asset at any time if—
(a) at that time it is a wasting asset, as defined in section 44, or
(b) within the period of 10 years beginning at that time it will become a wasting asset (so defined).
The classes of assets for the purposes of section 152(1) are as follows.
CLASS 1
Assets within heads A and B below.
Head A
Any building or part of a building and any permanent or semi-permanent structure in the nature of a building, occupied (as well as used) only for the purposes of the trade
Any land occupied (as well as used) only for the purposes of the trade.
Head A has effect subject to section 156.
Head B
Fixed plant or machinery which does not form part of a building or of a permanent or semi-permanent structure in the nature of a building.
CLASS 2
Ships, aircraft and hovercraft (“hovercraft” having the same meaning as in the Hovercraft Act 1968).
CLASS 3
Satellites, space stations and spacecraft (including launch vehicles).
CLASS 4
Goodwill.
CLASS 5
Milk quotas (that is, rights to sell dairy produce without being liable to pay milk levy or to deliver dairy produce without being liable to pay a contribution to milk levy) and potato quotas (that is, rights to produce potatoes without being liable to pay more than the ordinary contribution to the Potato Marketing Board’s fund).
CLASS 6
Ewe and suckler cow premium quotas (that is, rights in respect of any ewes or suckler cows to receive payments by way of any subsidy entitlement to which is determined by reference to limits contained in a Community instrument).
CLASS 7
Fish quota (that is, an allocation of quota to catch fish stocks, which derives from the Total Allowable Catches set in pursuance of Article 8(4) of Council Regulation (EEC) 3760/92 and under annual Council Regulations made in accordance with that Article, or under any replacement Community Instruments).
CLASS 7A
Assets within heads A and B below.
Head A
Payment entitlements under the single payment scheme (that is, the scheme of income support for farmers in pursuance of Title III of Council Regulation (EC) No 73/2009).
Head B
Payment entitlements under the basic payment scheme (that is, the scheme of income support for farmers in pursuance of Regulation (EU) No 1307/2013 of the European Parliament and of the Council).
CLASS 8
Assets within heads A and B below.
Head A
Rights of a member of Lloyd’s under a syndicate within the meaning of Chapter III of Part II of the Finance Act 1993.
Head B
An asset which a member of Lloyd’s is treated as having acquired by virtue of section 82 of the Finance Act 1999.
(1) This section has effect as respects head A of Class 1 in section 155.
(2) Head A shall not apply where the trade is a trade—
(a) of dealing in or developing land, or
(b) of providing services for the occupier of land in which the person carrying on the trade has an estate or interest.
(3) Where the trade is a trade of dealing in or developing land, but a profit on the sale of any land held for the purposes of the trade would not form part of the trading profits, then, as regards that land, the trade shall be treated for the purposes of subsection (2)(a) above as if it were not a trade of dealing in or developing land.
(4) Where ... section 19 of ITTOIA 2005 or section 42 of CTA 2009 applies (tied premises: receipts and expenses treated as those of trade), the trader shall be treated, to the extent that the conditions in subsection (1) of that section are met in relation to premises, as occupying as well as using the premises for the purposes of the trade.
(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 Intangible fixed assets: interaction with relief under Chapter 7 of Part 8 of CTA 2009
(1) Subsection (2) 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.
156A Cessation of trade by limited liability partnership.
(1) Where, immediately before the time of cessation of trade, a member of a limited liability partnership holds an asset, or an interest in an asset, acquired by him for a consideration treated as reduced under section 152 or 153, he shall be treated as if a chargeable gain equal to the amount of the reduction accrued to him immediately before that time.
(2) Where, as a result of section 154(2), a chargeable gain on the disposal of an asset, or an interest in an asset, by a member of a limited liability partnership has not accrued before the time of cessation of trade, the member shall be treated as if the chargeable gain accrued immediately before that time.
(3) In this section “the time of cessation of trade”, in relation to a limited liability partnership, means the time when section 59A(1) ceases to apply in relation to the limited liability partnership.
157 Trade carried on by family company: business assets dealt with by individual.
In relation to a case where—
(a) the person disposing of, or of his interest in, the old assets and acquiring the new assets, or an interest in them, is an individual, and
(b) the trade or trades in question are carried on not by that individual but by a company which, both at the time of the disposal and at the time of the acquisition referred to in paragraph (a) above, is his personal company, that is to say, a company the voting rights in which are exercisable, as to not less than 5 per cent., by him,
any reference in sections 152 to 156 to the person carrying on the trade (or the 2 or more trades) includes a reference to that individual.
158 Activities other than trades, and interpretation.
(1) Sections 152 to 157 shall apply with the necessary modifications—
(a) in relation to the discharge of the functions of a public authority, and
(b) in relation to the occupation of woodlands where the woodlands are managed by the occupier on a commercial basis and with a view to the realisation of profits, and
(c) in relation to a profession, vocation, office or employment, and
(d) in relation to such of the activities of a body of persons whose activities are carried on otherwise than for profit and are wholly or mainly directed to the protection or promotion of the interests of its members in the carrying on of their trade or profession as are so directed, and
(e) in relation to the activities of an unincorporated association or other body chargeable to corporation tax, being a body not established for profit whose activities are wholly or mainly carried on otherwise than for profit, but in the case of assets within head A of class 1 only if they are both occupied and used by the body, and in the case of other assets only if they are used by the body, and
(f) in relation to the activities of a company owned by such an unincorporated association or other body (“the parent body”), but in the case of any assets within head A of class 1 only if they are both occupied and used by the parent body, and in the case of any other assets only if they are used by the parent body,
as they apply in relation to a trade.
(1A) For the purposes of subsection (1)(f) the parent body owns the company if—
(a) it holds not less than 90% of the company’s ordinary share capital,
(b) it is beneficially entitled to not less than 90% of the profits available for distribution to the equity holders of the company, and
(c) it would be beneficially entitled on a winding up to not less than 90% of the assets of the company available for distribution to equity holders.
(1B) For the purposes of subsection (1A)—
(a) “ordinary share capital” has the meaning given by section 832(1) of the Taxes Act and also includes, in relation to a company that has no share capital, any interests in the company possessed by members of the company, and
(b) the meaning of “equity holder” and method of determination of profits or assets available for distribution shall be that prescribed for the purposes of paragraph 8 of Schedule 7AC by sub-paragraphs (2) and (3) of that paragraph.
(2) In sections 152 to 157 and this section the expressions “trade”, “profession”, “vocation”, “office” and “employment” have the same meanings as in the Income Tax Acts, ... .
(3) Sections 152 to 157 and this section shall be construed as one.
(1) Section 152 shall not apply in the case of a person if the old assets are chargeable assets in relation to him at the time they are disposed of, unless the new assets are chargeable assets in relation to him immediately after the time they are acquired.
(2) Subsection (1) above shall not apply where—
(a) the person acquires the new assets after he has disposed of the old assets, and
(b) immediately after the time they are acquired the person is resident ... in the United Kingdom.
(3) Subsection (2) above shall not apply where immediately after the time the new assets are acquired—
(a) the person is a dual resident, and
(b) the new assets are prescribed assets.
(4) For the purposes of this section an asset is at any time a chargeable asset in relation to a person if, were it to be disposed of at that time, any chargeable gains accruing to him on the disposal would be chargeable to capital gains tax under section 1A(3)(a) or to corporation tax under section 2B(3).
(5) In this section—
“dual resident” means a person who is resident ... in the United Kingdom and falls to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom; and
“prescribed asset”, in relation to a dual resident, means an asset in respect of which, by virtue of the asset being of a description specified in any double taxation relief arrangements, he falls to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to him on a disposal.
(6) In this section—
(a) “the old assets” and “the new assets” have the same meanings as in section 152,
(b) references to disposal of the old assets include references to disposal of an interest in them, and
(c) references to acquisition of the new assets include references to acquisition of an interest in them or to entering into an unconditional contract for the acquisition of them.
(7) Where the acquisition of the new assets took place before 14th March 1989 and the disposal of the old assets took place, or takes place, on or after that date, this section shall not apply if the disposal of the old assets took place, or takes place, within 12 months of the acquisition of the new assets or such longer period as the Board may by notice allow.
159A Disposals of interests in UK land by non-residents: roll-over relief
(1) This section applies in a case where—
(a) the old assets that are disposed of are interests in UK land, and
(b) a chargeable gain accruing on the disposal would (apart from section 152) be within the charge to tax because of section 1A(3)(b) or 2B(4)(a).
(2) Section 152 applies only if the new assets that are acquired are interests in UK land.
(3) In this section—
(a) “interest in UK land” has the meaning given by section 1C,
(b) “the old assets” and “the new assets” have the same meaning as in section 152,
(c) any reference to a disposal of the old assets includes a disposal of an interest in them,
(d) the reference to the acquisition of the new assets includes the acquisition of an interest in them or entering into an unconditional contract for their acquisition.
(1) Subject to subsection (3) below, where an asset acquired by a person otherwise than as trading stock of a trade carried on by him is appropriated by him for the purposes of the trade as trading stock (whether on the commencement of the trade or otherwise) and, if he had then sold the asset for its market value, a chargeable gain or allowable loss would have accrued to him, he shall be treated as having thereby disposed of the asset by selling it for its then market value.
(2) If at any time an asset forming part of the trading stock of a person’s trade is appropriated by him for any other purpose, or is retained by him on his ceasing to carry on the trade, he shall be treated as having acquired it at that time for a consideration equal to the amount brought into the accounts of the trade in respect of it for tax purposes on the appropriation or on his ceasing to carry on the trade, as the case may be.
(3) Subject to subsection (4) below, subsection (1) above shall not apply in relation to a case where a chargeable gain would have accrued to a person on the appropriation of an asset for the purposes of a trade as mentioned in that subsection if—
(a) he is chargeable to corporation tax in respect of the profits of the trade under Chapter 2 of Part 3 of CTA 2009 and the trade is carried on wholly or partly in the United Kingdom, or
(b) he is chargeable to income tax in respect of the profits of the trade under Chapter 2 of Part 2 of ITTOIA 2005 and the trade is carried on wholly or partly in the United Kingdom,
and he elects that instead the market value of the asset at the time of the appropriation shall, in computing the profits of the trade for purposes of tax, be treated as reduced by the amount of that chargeable gain, and where subsection (1) does not apply by reason of such an election, the profits of the trade shall be computed accordingly.
(3ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3ZB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3A) An election under subsection (3) ... above shall be made—
(a) for the purposes of capital gains tax, on or before the first anniversary of the 31st January next following the year of assessment in which ends the period of account in which the asset is appropriated for the purposes of the trade as trading stock;
(b) for the purposes of corporation tax, within 2 years after the end of the accounting period in which the asset is appropriated for the purposes of the trade as trading stock;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If a person making an election under subsection (3) or (3ZA) is at the time of the appropriation carrying on the trade in partnership with others, the election shall not have effect unless concurred in by the others.
(5) If—
(a) any person is charged to income tax by virtue of sections 517B and 517C of ITA 2007 (certain profits or gains on a disposal of land treated as trading profits) on the realisation of a profit or gain because the condition in section 517B(7) of that Act is met, and
(b) the gain is calculated on the basis that any property was appropriated as trading stock,
the property shall be treated on that basis also for the purposes of this section.
(6) If—
(a) any person is charged to corporation tax by virtue of sections 356OB and 356OC of CTA 2010 (certain profits or gains on a disposal of land treated as trading profits) on the realisation of a profit or gain because the condition in section 356OB(7) of that Act is met, and
(b) the gain is calculated on the basis that any property was appropriated as trading stock,
the property shall be treated on that basis also for the purposes of this section.
(1) This section shall apply for the purposes of this Act—
(a) where a person who is not a company transfers to a company a business as a going concern, together with the whole assets of the business, or together with the whole of those assets other than cash, and the business is so transferred wholly or partly in exchange for shares issued by the company to the person transferring the business , and
(b) the person makes a claim in respect of the transfer, including such information as the Commissioners may require, on or before the first anniversary of the 31 January following the tax year in which the transfer of the business took place.
Any shares so received by the transferor in exchange for the business are referred to below as “the new assets”.
(2) The amount determined under subsection (4) below shall be deducted from the aggregate of the chargeable gains less allowable losses (“the amount of the gain on the old assets”).
(3) For the purpose of computing any chargeable gain accruing on the disposal of any new asset—
(a) the amount determined under subsection (4) below shall be apportioned between the new assets as a whole, and
(b) the sums allowable as a deduction under section 38(1)(a) shall be reduced by the amount apportioned to the new asset under paragraph (a) above;
and if the shares which comprise the new assets are not all of the same class, the apportionment between the shares under paragraph (a) above shall be in accordance with their market values at the time they were acquired by the transferor.
(4) The amount referred to in subsections (2) and (3)(a) above shall not exceed the cost of the new assets but, subject to that, it shall be the fraction—
A
B
of the amount of the gain on the old assets where—
“A” is the cost of the new assets, and
“B” is the value of the whole of the consideration received by the transferor in exchange for the business;
and for the purposes of this subsection “the cost of the new assets” means any sums which would be allowable as a deduction under section 38(1)(a) if the new assets were disposed of as a whole in circumstances giving rise to a chargeable gain.
(5) References in this section to the business, in relation to shares or consideration received in exchange for the business, include references to such assets of the business as are referred to in subsection (l) above.
(6) In this section, “the Commissioners” means the Commissioners for His Majesty’s Revenue and Customs.
(1) This section applies where—
(a) a company transfers its business to some or all of the shareholders of the company, and
(b) a claim for disincorporation relief in respect of the transfer has been made under section 58 of the Finance Act 2013.
(2) The disposal and acquisition of any qualifying asset of the business included in the transfer is to be deemed to be for a consideration equal to the lower of—
(a) the sums allowable under section 38 as a deduction in the computation of the gain accruing to the company on the disposal of the asset in question, and
(b) the market value of the asset.
(3) In subsection (2) a “qualifying asset” means—
(a) goodwill, or
(b) an interest in land which is not held as trading stock.
(4) But subsection (2) does not apply to the goodwill of the business if section 162C applies to it.
(1) This section applies where—
(a) a company transfers its business to some or all of the shareholders of the company,
(b) a claim for disincorporation relief in respect of the transfer has been made under section 58 of the Finance Act 2013, and
(c) section 849A of CTA 2009 (disincorporation relief: transfer values for post-FA 2002 goodwill) applies to the transfer of the goodwill of the business.
(2) The acquisition of the goodwill of the business is deemed to be for a consideration equal to the value at which the goodwill is treated as transferred by virtue of section 849A of CTA 2009.