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In force since 2026-04-06, as the publisher states.
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This Chapter makes provision about an individual claiming business asset disposal relief in certain cases where relief would otherwise become unavailable because of a company ceasing to be the individual's personal company.
Propose a change(1) If the following conditions are met, an individual may elect for this section to have effect. (2) The first condition is that, as a result of a relevant share issue, the company ceases to be the individual's personal company. (3) The second condition is that— (a) if, immediately before the relevant share issue, the individual had made a disposal at their relevant value of all assets consisting of shares in or securities of the company, the disposal would have been a material disposal of business assets, and (b) if a claim for business asset disposal relief had been made in respect of that disposal, a chargeable gain would have been treated by section 169N(2) as accruing to the individual. (4) Where this section has effect, the individual is to be treated for the purposes of this Act— (a) as having made a disposal immediately before the relevant share issue of all assets consisting of shares in or securities of the company, and (b) immediately after that event, as having reacquired those assets, at their relevant value. (5) In this section— “material disposal of business assets” and “personal company” have the same meanings as in Chapter 3 (see section 169S), “relevant share issue” means an issue of shares by the company where— the shares are issued by the company for consideration consisting wholly of cash, and the shares are subscribed, and issued, for genuine commercial reasons and not as part of arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage to any person, and “relevant value” means— in relation to an asset consisting of shares, an amount equal to the consideration that would be apportioned to the asset if, immediately before the relevant share issue, the whole of the issued share capital of the company were sold for a consideration equal to its market value at that time, or in relation to any other asset, its market value at the time of the relevant share issue. (6) For the purposes of the definition of “relevant share issue” in subsection (5)— “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, or the avoidance of a possible assessment to tax, and for the purposes of this definition “tax” means capital gains tax, corporation tax or income tax. (7) In this Chapter— (a) references to “the notional disposal” are references to the disposal mentioned in subsection (4)(a), (b) references to “the notional gain” are references to the chargeable gain mentioned in subsection (3)(b), and (c) references to shares in or securities of a company include references to interests in such shares or securities.
Propose a change(1) An individual who makes an election under section 169SC may also elect that, for the purposes of this Act— (a) no chargeable gain or allowable loss is to be treated as accruing to the individual on the notional disposal, but (b) a chargeable gain calculated in accordance with this section is to be treated as accruing to the individual on any subsequent disposal by the individual of one or more assets consisting of shares in or securities of the company (in addition to any gain or loss that actually accrues on that disposal). (2) The chargeable gain treated as accruing to the individual on a subsequent disposal is the amount resulting from the following steps— Step 1 Attribute the notional gain to each of the classes of shares in or securities of the company which are the subject of the notional disposal. The attribution must be made, in relation to each class, by reference to the proportion that— the relevant gains (see section 169N(5)) accruing on the notional disposal in respect of shares or securities within each class bears to the total amount of relevant gains accruing on the notional disposal. Step 2 Apportion the amount attributed to each class under Step 1 to the shares or securities of that class which are the subject of the subsequent disposal. The apportionment must be by reference to the proportion that— the nominal value of the shares or securities of that class which are the subject of the subsequent disposal bears to the nominal value of shares or securities of that class which are the subject of the notional disposal. Step 3 The amount resulting from these steps is— the total of the amounts apportioned to shares or securities under Step 2, but excluding, in relation to each class of shares or securities, so much of those amounts as would, together with any chargeable gains treated by this section as accruing on previous disposals of shares or securities of that class, exceed the amount attributed to that class under Step 1. (3) If the subsequent disposal is a disposal by virtue of section 122, the nominal value of shares of a particular class which are the subject of that disposal is to be treated for the purposes of Step 2 of subsection (2) as being equal to the nominal value of shares of that class as are the subject of the notional disposal.
Propose a change(1) This section has effect in any case where a transaction occurs to which section 116 (reorganisations, conversions and reconstructions) applies. (2) If sections 116(10)(b) and 169SD(1)(b) have effect in relation to a subsequent disposal of the new asset— (a) there must be calculated the chargeable gain that would have been treated by section 169SD(1)(b) as accruing to the individual if, at the time of the relevant transaction, the old asset had been disposed of immediately before that transaction, (b) the whole or a corresponding part of the chargeable gain mentioned in paragraph (a) is to be treated as accruing on the subsequent disposal of the whole or part of the new asset (in addition to any gain or loss that actually accrues on that disposal and any chargeable gain treated by section 116(10)(b) as accruing on that disposal), and (c) on that subsequent disposal, section 115 (exemptions for gilt-edged securities and qualifying corporate bonds) has effect only in relation to any gain that actually accrues and not in relation to any gain which is treated as accruing by virtue of paragraph (b). (3) In subsection (2) “the new asset”, “the old asset” and “the relevant transaction” have the same meanings as in section 116.
Propose a change(1) This section has effect in any case where a transaction occurs to which sections 127 to 130 (treatment of share capital following a reorganisation) apply by virtue of any provision of Chapter 2 of Part 4. (2) If a gain is treated by section 169SD(1)(b) as accruing on a subsequent disposal of the new holding and it is necessary to apportion the gain between shares or securities forming part of that new holding, the apportionment must be made in the same proportions as those in which the costs of acquisition of the original shares fall to be apportioned under the provisions of that Chapter. (3) If subsection (3) of section 128 (consideration given or received by holder) has effect in relation to an individual, the individual is treated for the purposes of section 169SD as making the disposal of the interest in the original shares mentioned in that subsection. (4) In this section “the new holding” and “the original shares” have the same meanings as in sections 127 to 130 (see section 126).
Propose a change(1) An election under section 169SC or 169SD is irrevocable. (2) An election under section 169SC must be made on or before the first anniversary of the 31 January following the tax year in which the notional disposal is made (“the relevant tax year”). (3) An election under section 169SD may not be made more than 4 years after the end of the relevant tax year. (4) If— (a) an individual makes an election under both sections 169SC and 169SD, and (b) a tax return under the Management Act would not otherwise be required for the relevant tax year, the individual may make the elections by giving notice on or before the first anniversary of the 31 January following the relevant tax year.
Propose a change(1) Where, as a result of an election under section 169SD, a chargeable gain is to be treated as accruing on a subsequent disposal, the following rules have effect. (2) The individual making the subsequent disposal must make a claim for business asset disposal relief on or before the first anniversary of the 31 January following the first tax year in which, as a result of the election, the chargeable gain is to be treated as accruing. (3) The chargeable gain is to be treated for the purposes of section 169N as the amount resulting from a calculation under subsection (1) of that carried out when that chargeable gain accrues and because of the claim mentioned in subsection (2). (4) If the chargeable gain is a part only of the notional gain, each chargeable gain that subsequently accrues is to be treated for the purposes of section 169N as the amount resulting from a calculation under subsection (1) of that section carried out when that chargeable gain arises and because of the claim mentioned in subsection (2). (5) In relation to the claim for business asset disposal relief in respect of the chargeable gain, the company is to be treated for the purposes of condition A in section 169I(6) as if it were, throughout the period of 2 years ending with the date of the subsequent disposal, the individual's personal company.
Propose a changeThis Chapter makes provision about claiming business asset disposal relief in certain cases where, in relation to held-over gains that originally arose on a business disposal, there is a chargeable event for the purposes of Schedule 5B or 8B (relief for gains invested under the enterprise investment scheme or in social enterprises).
Propose a change(1) Section 169V applies if, ignoring the operation of section 169V(2)(b), each of the following conditions is met. (2) The first condition is that a chargeable gain (“the first eventual gain”) accrues as a result of the operation of— paragraph 4 of Schedule 5B (enterprise investment scheme), or paragraph 5 of Schedule 8B (investments in social enterprises). (3) If the first condition is met, the paragraph and Schedule mentioned in subsection (2) that apply in the case are referred to in this section, and section 169V, as “the relevant paragraph” and “the applicable Schedule”. (4) The second condition is— (a) that the first eventual gain accrues in a case in which the original gain would, but for the operation of the applicable Schedule, have accrued on a relevant business disposal, or (b) where the first eventual gain accrues in a case in which the original gain would, but for the operation of the applicable Schedule, have accrued as a result of the operation of either of the paragraphs mentioned in subsection (2), that the underlying disposal is a relevant business disposal. (5) The third condition is that a claim for business asset disposal relief in respect of the first eventual gain is made, on or before the first anniversary of the 31 January following the tax year in which the first eventual gain accrues, by the individual who made the disposal mentioned in subsection (4)(a) or (b). (6) The fourth condition is that the first eventual gain is the first gain to accrue in the case as a result of the operation of the relevant paragraph. (7) In subsection (4) “the underlying disposal” means the disposal (not being a disposal within paragraph 3 of Schedule 5B or paragraph 6 of Schedule 8B) by virtue of which Schedule 5B or 8B has effect. (8) For the purposes of subsection (4), whether the disposal on which the original gain would have accrued is a relevant business disposal, or whether the underlying disposal is a relevant business disposal, is to be decided according to the law applicable to disposals made at the time the disposal was made. (9) In this section— “the original gain”, in relation to a particular case, has the same meaning as in the applicable Schedule, “relevant business asset” has the meaning given by section 169L, and “relevant business disposal” means— a disposal— within section 169H(2)(a) or (c) (qualifying business disposals), and consisting of the disposal of (or of interests in) shares in or securities of a company, or a disposal of relevant business assets which is comprised in a disposal— within section 169H(2)(a) or (c), and not consisting of the disposal of (or of interests in) shares in or securities of a company.
Propose a change(1) Where this section applies, the following rules have effect. (2) The gain mentioned in section 169U(2) (“the first eventual gain”)— (a) is treated for relevant purposes as the amount resulting from a calculation under section 169N(1) carried out— (i) in respect of a qualifying business disposal made when the first eventual gain accrues, and (ii) because of the claim mentioned in section 169U(5), and (b) except for relevant purposes, is not to be taken into account under this Act as a chargeable gain. (3) If the first eventual gain is a part only of the original gain in the case concerned, each part of the original gain that subsequently accrues as a chargeable gain as a result of the operation of the relevant paragraph— (a) is treated for relevant purposes as the amount resulting from a calculation under section 169N(1) carried out— (i) in respect of a qualifying business disposal made when that chargeable gain so accrues, and (ii) because of the claim mentioned in section 169U(5), and (b) except for relevant purposes, is not to be taken into account under this Act as a chargeable gain. (4) If the disposal mentioned in paragraph (a) or (b) of section 169U(4) is a disposal within section 169H(2)(c) (qualifying business disposal: disposal associated with a relevant material disposal)— (a) a disposal mentioned in subsection (2) or (3) of this section is treated for the purposes of section 169P(1) as a disposal associated with a relevant material disposal, but (b) section 169P applies in relation to that disposal as if the disposal referred to in section 169P(4) were the disposal mentioned in section 169U(4)(a) or (b). (5) In this section “relevant purposes” means the purposes of— (a) section 169N(2) to (4B), (7) and (8), and (b) section 169P.
Propose a change(1) This Chapter provides for a relief, in the form of a lower rate of capital gains tax, in respect of disposals of (and disposals of interests in) certain ordinary shares in unlisted companies. (2) Section 169VB defines “qualifying shares”, “potentially qualifying shares” and “excluded shares”. (3) Section 169VC creates the relief, and relief under that section is to be known as “investors' relief”. (4) Section 169VD makes provision about disposals from holdings consisting partly of qualifying shares. (5) Sections 169VE to 169VG contain rules for cases where there have been previous disposals from a holding, to determine which shares remain in the holding. (6) Sections 169VH and 169VI make provision about disposals by trustees of a settlement. (7) Section 169VJ makes provision about disposals of interests in shares. (8) Sections 169VK and 169VL provide for a cap on the amount of investors' relief that can be claimed. (9) Section 169VM makes provision about claims for investors' relief. (10) Sections 169VN to 169VT make provision about how investors' relief applies following a company's reorganisation of its share capital, an exchange of shares or securities or a scheme of reconstruction. (11) Sections 169VU to 169VY contain definitions for the purposes of this Chapter.
Propose a change(1) Where there is a disposal of all or part of (or of an interest in) a holding of shares in a company, this section applies to determine whether a share which is in the holding at the time immediately before the disposal (“the relevant time”) is for the purposes of this Chapter— (a) a qualifying share, (b) a potentially qualifying share, or (c) an excluded share. (2) The share is a “qualifying share” at the relevant time if— (a) the share was subscribed for, within the meaning given by section 169VU, by the person making the disposal (“the investor”), (b) the investor has held the share continuously for the period beginning with the issue of the share and ending with the relevant time (“the share-holding period”), (c) the share was issued on or after 17 March 2016, (d) at the time the share was issued, none of the shares or securities of the company that issued it were listed on a recognised stock exchange, (e) the share was an ordinary share when issued and is an ordinary share at the relevant time, (f) the company that issued the share— (i) was a trading company or the holding company of a trading group (as defined by section 169VV) when the share was issued, and (ii) has been so throughout the share-holding period, (g) at no time in the share-holding period was the investor or a person connected with the investor a relevant employee in respect of that company (within the meaning given by section 169VW), and (h) the period beginning with the date the share was issued and ending with the date of the disposal is at least 3 years. (3) The share is a “potentially qualifying share” at the relevant time if— (a) the conditions in subsection (2)(a) to (g) are met, but (b) the period beginning with the date the share was issued and ending with the date of the disposal is less than 3 years. (4) The share is an “excluded share” at the relevant time if it is, at that time— (a) not a qualifying share, and (b) not a potentially qualifying share. (5) This section is subject to Schedule 7ZB (disqualification of share where value received by investor). (6) In relation to a share issued on or after 17 March 2016 but before 6 April 2016, any reference in subsection (2)(h) or (3) to “3 years” is to be read as a reference to the minimum period. (7) In subsection (6) “the minimum period” means the period of 3 years extended by a period equal in length to the period beginning with the date the share was issued and ending with 5 April 2016.
Propose a change(1) This section applies where— (a) a qualifying person disposes of a holding, or part of a holding, of shares in a company, and (b) immediately before that disposal some or all of the shares in the holding are qualifying shares. (2) If— (a) a chargeable gain accrues to the qualifying person on the disposal, and (b) a claim for relief under this section is made, the rate of capital gains tax in respect of the relevant gain is 18%. (3) In subsection (2) “the relevant gain” means— (a) where immediately before the disposal all the shares in the holding are qualifying shares, the chargeable gain on the disposal; (b) where at that time only some of the shares in the holding are qualifying shares, the appropriate part of that chargeable gain (defined by section 169VD). (4) In this section— (a) subsection (1) is subject to section 169VH (disposals by trustees of a settlement: further conditions for relief), and (b) subsection (2) is subject to— section 169VI (reduction of relief for certain disposals by trustees of a settlement), and sections 169VK and 169VL (cap on investors' relief). (5) A reference in subsection (3) to the chargeable gain on the disposal, or to the appropriate part of that gain, is a reference to that chargeable gain, or (as the case may be) that part, after any deduction of allowable losses which is made in accordance with this Act from that chargeable gain or from that part. (6) For the application of this section to disposals of interests in shares, see section 169VJ. (7) In this Chapter a “qualifying person” means— (a) an individual, or (b) the trustees of a settlement.
Propose a change(1) This section applies where— (a) a disposal (“the disposal concerned”) is made as mentioned in section 169VC(1), and (b) at the time immediately before the disposal, only some of the shares in the holding are qualifying shares. (2) Where this section applies, for the purposes of section 169VC(3) “the appropriate part” of the chargeable gain on the disposal is so much of that chargeable gain as is found by multiplying it by the appropriate fraction. (3) The appropriate fraction is— Q T where— Q is the number of qualifying shares found under subsection (4), and T is the total number of shares disposed of in the disposal concerned. (4) The number of qualifying shares found under this subsection is— (a) all the qualifying shares in the holding at the time immediately before the disposal concerned, or (b) if less, such number of those qualifying shares as equals the number of shares disposed of in that disposal.
Propose a change(1) This section applies where— (a) a particular disposal is made as mentioned in section 169VC(1)(a) (“the current disposal”), (b) there have been one or more previous disposals of shares from the holding mentioned in section 169VC(1) before the current disposal, and (c) it is necessary to determine for the purposes of this Chapter which shares are to be treated as in the holding immediately before the current disposal (and, accordingly, which shares are to be treated as having been disposed of in those previous disposals). (2) In the case of a previous disposal as regards which investors' relief has been claimed or is being claimed, the shares to be treated as disposed of in that previous disposal are to be determined in accordance with the rules in section 169VF. (3) In the case of a previous disposal not falling within subsection (2), the shares to be treated as disposed of in that previous disposal are to be determined in accordance with the rules in section 169VG.
Propose a change(1) The rules referred to in section 169VE(2) are as follows; and in this section “the disposal concerned” means the previous disposal mentioned in section 169VE(2). (2) There are to be treated as having been disposed of in the disposal concerned— (a) all the qualifying shares in the holding at the time immediately before that disposal (“the material time”), or (b) if less, such number of those qualifying shares as equals the number of shares disposed of in that disposal. (3) If— (a) the number of qualifying shares in the holding at the material time was less than the total number of shares disposed of, and (b) excluded shares were in the holding at the material time, the available excluded shares are also to be treated as having been disposed of. (4) “The available excluded shares” means— (a) all the excluded shares in the holding at the material time, or (b) if less, such number of those excluded shares as is equal to the difference between— (i) the total number of shares disposed of, and (ii) the number of qualifying shares in the holding at the material time. (5) If the number of shares treated under subsections (2) to (4) as disposed of in the disposal concerned is less than the total number of shares disposed of, such number of the potentially qualifying shares in the holding at the material time as is equal to the difference are also to be treated as having been disposed of. (6) Where the number of potentially qualifying shares in the holding at the material time exceeds the difference mentioned in subsection (5), under that subsection potentially qualifying shares acquired later are to be treated as disposed of in preference to ones acquired earlier. (7) In this section “disposed of” (without more) means disposed of in the disposal concerned.
Propose a change(1) The rules referred to in section 169VE(3) are as follows; and in this section “the disposal concerned” means the previous disposal mentioned in section 169VE(3). (2) If any excluded shares were in the holding at the time immediately before the disposal concerned (“the material time”), the maximum number of excluded shares are to be treated as having been disposed of in the disposal concerned. (3) “The maximum number of excluded shares” means— (a) all the excluded shares in the holding at the material time, or (b) if less, such number of those excluded shares as is equal to the number of shares disposed of. (4) If— (a) there were no excluded shares in the holding at the material time, or the number of such shares was less than the total number of shares disposed of, and (b) potentially qualifying shares were in the holding at the material time, the available potentially qualifying shares are to be treated as having been disposed of. (5) “The available potentially qualifying shares” means— (a) all the potentially qualifying shares in the holding at the material time, or (b) if less, such number of those potentially qualifying shares as is equal to the difference between— (i) the total number of shares disposed of, and (ii) the number of excluded shares in the holding at the material time. (6) Where the number of potentially qualifying shares in the holding at the material time exceeds the difference mentioned in subsection (5), potentially qualifying shares acquired later are to be treated as disposed of in preference to ones acquired earlier. (7) If the number of shares treated under subsections (2) to (5) as disposed of in the disposal concerned is less than the total number of shares disposed of, such number of the qualifying shares in the holding at the material time as is equal to the difference are to be treated as having been disposed of. (8) In this section “disposed of” (without more) means disposed of in the disposal concerned.
Propose a change(1) Where a disposal falling within section 169VC(1)(a) and (b) is made by the trustees of a settlement, section 169VC does not apply to the disposal unless there is at least one individual who is an eligible beneficiary in respect of the disposal. (2) For the purposes of this section, an individual is an “eligible beneficiary” in respect of the disposal if— (a) at the time immediately before the disposal, the individual has under the settlement an interest in possession in settled property that includes or consists of the holding of shares mentioned in section 169VC(1), (b) the individual has had such an interest in possession under the settlement throughout the period of 3 years ending with the date of the disposal, (c) at no time in that period has the individual been a relevant employee in respect of the company that issued the shares (within the meaning given by section 169VW), and (d) the individual has (by the time of the claim under section 169VC in respect of the disposal) elected to be treated as an eligible beneficiary in respect of the disposal. (3) For the purposes of subsection (2)(d), an individual elects to be treated as an eligible beneficiary in respect of a disposal if the individual tells the trustees (by whatever means) that he or she wishes to be so treated; and an election under subsection (2)(d) may be withdrawn by the individual at any time until the claim is made. (4) In this section “interest in possession” does not include an interest in possession for a fixed term. (5) In relation to a disposal made by the trustees of a settlement, any reference in section 169VB(2)(g) to the investor is to be read as a reference to any trustee of the settlement.
Propose a change(1) Subsection (2) applies where— (a) a disposal falling within section 169VC(1)(a) and (b) is made by the trustees of a settlement, (b) section 169VC applies to the disposal by reason of there being at least one individual who is an eligible beneficiary in respect of the disposal (see section 169VH), and (c) at the time immediately before the disposal, there are two or more persons each of whom has under the settlement an interest in possession in the settled property. (2) In such a case the reference in section 169VC(2) to the relevant gain is to be read as a reference— (a) to the eligible beneficiary's share of the relevant gain (see subsections (3) to (6)), or (b) if there is more than one individual who is an eligible beneficiary in respect of the disposal, to so much of the relevant gain as is equal to the aggregate of the eligible beneficiaries' shares of that gain. (3) In this section— “eligible beneficiary” has the meaning given by section 169VH(2); “relevant gain” has the meaning given by section 169VC(3); “the settled property” means settled property that includes or consists of the holding of shares mentioned in section 169VC(1). (4) Subsection (5) applies to determine for the purposes of this Chapter, in relation to any individual who is an eligible beneficiary in respect of a disposal within section 169VC(1) made by the trustees of a settlement, that individual's share of the relevant gain. (5) That individual's share of the relevant gain on the disposal is so much of the relevant gain on the disposal as bears to the whole of that gain the same proportion as X bears to Y, where— X is the interest in possession (other than for a fixed term) which, at the time immediately before the disposal, that individual has under the settlement in the income from the holding of shares mentioned in section 169VC(1), and Y is all the interests in that income that persons (including that individual) with interests in possession in that holding have under the settlement at that time.
Propose a change(1) In section 169VC(1)(a), the reference to the case where a qualifying person disposes of a holding, or part of a holding, of shares in a company includes the case where a qualifying person disposes of an interest in a relevant holding. (2) In this section a “relevant holding” means either— (a) a number of shares in a company which are of the same class and were acquired in the same capacity jointly by the same two or more persons including the qualifying person, or (b) a number of shares in a company which are of the same class and were acquired in the same capacity by the qualifying person solely. (3) In this section— (a) “an interest” in a relevant holding means any interests of the qualifying person, in any of the shares in the relevant holding, which are by virtue of section 104 to be regarded as a single asset, and (b) references to an interest include part of an interest. (4) Where section 169VC(1) applies by reason of this section, section 169VD(3) and (4) have effect as if any reference to the number of shares disposed of were a reference to the number of shares an interest in which is disposed of. (5) In relation to a disposal by the trustees of a settlement of an interest in a relevant holding falling within subsection (2)(a), sections 169VH(2) and 169VI(3) and (5) have effect as if any reference to the holding of shares mentioned in section 169VC(1) were to the interest disposed of. (6) In accordance with subsection (1)— (a) in sections 169VN(1)(d), 169VP(1)(d) and 169VS(1)(d) (reorganisations), any reference to a disposal of all or part of a holding includes a disposal by the qualifying person of an interest in the holding, and (b) the reference in section 169VT(2) to a disposal of the original shares is to be read, in relation to a case where the original shares fall within subsection (2)(a) above, as a reference to a disposal of the qualifying person's interest in those shares.
Propose a change(1) This section applies if, on a disposal within section 169VC(1) made by an individual (“the individual concerned”), the aggregate of— (a) the amount of the relevant gain on the disposal (“the gain in question”), (b) the total amount of any gains that, in relation to earlier disposals by the individual concerned, were charged at the rate in section 169VC(2), and (c) the total amount of any reckonable trust gains that, on any previous trust disposals in respect of which the individual concerned was an eligible beneficiary, were charged at the rate in section 169VC(2), exceeds £1 million. (2) The rate in section 169VC(2) applies only to so much (if any) of the gain in question as, when added to the aggregate of the total amounts mentioned in subsection (1)(b) and (c), does not exceed £1 million. (3) Section 1H (rates of capital gains tax) applies to so much of the gain in question as is not subject to the rate in section 169VC(2). (4) In this section— “eligible beneficiary”, in relation to a disposal, is to be read in accordance with section 169VH(2); “reckonable trust gain”, in relation to a trust disposal in respect of which the individual concerned was an eligible beneficiary, means— if section 169VI(1)(c) applied in relation to the disposal, that individual's share of the relevant gain on that disposal, within the meaning given by section 169VI(4) and (5); otherwise, the relevant gain on that disposal; “the relevant gain”, in relation to a disposal, has the meaning given by section 169VC(3); “trust disposal” means a disposal by the trustees of a settlement.
Propose a change(1) This section applies where— (a) a disposal (“the disposal in question”) is made by the trustees of a settlement, (b) that disposal is within section 169VC(1), and (c) there is an excess amount in relation to an individual who is an eligible beneficiary in respect of the disposal in question (“the individual concerned”). (2) For the purposes of this section there is an “excess amount” in relation to the individual concerned if the aggregate of— (a) the amount of the current gain, (b) the total amount of any gains that, in relation to earlier disposals made by the individual concerned, were charged at the rate in section 169VC(2), and (c) the total amount of any reckonable trust gains that, on any previous trust disposals in respect of which the individual concerned was an eligible beneficiary, were charged at the rate in section 169VC(2), exceeds £1 million. (3) The rate in section 169VC(2) applies to the current gain only to the extent (if any) that the current gain when added to the aggregate of the total amounts mentioned in subsection (2)(b) and (c) does not exceed £1 million. (4) Section 1H (rates of capital gains tax) applies to so much of the current gain as is not subject to the rate in section 169VC(2). (5) In this section— “the current gain” means the reckonable trust gain on the disposal in question; “eligible beneficiary”, in relation to a disposal, is to be read in accordance with section 169VH(2); “reckonable trust gain”, in relation to any trust disposal in respect of which the individual concerned is an eligible beneficiary, means— if section 169VI(1)(c) applies in relation to the disposal, that individual's share of the relevant gain on that disposal, within the meaning given by section 169VI(4) and (5); otherwise, the relevant gain on that disposal; “the relevant gain”, in relation to a disposal, has the meaning given by section 169VC(3); “trust disposal” means a disposal by the trustees of a settlement.
Propose a change(1) Any claim for investors' relief must be made— (a) in the case of a disposal by an individual, by that individual; (b) in the case of a disposal by the trustees of a settlement, jointly by— (i) the trustees, and (ii) the eligible beneficiary in respect of the disposal, within the meaning given by section 169VH(2) (or, if more than one, all those eligible beneficiaries). (2) Any claim for investors' relief in respect of a disposal must be made on or before the first anniversary of the 31 January following the tax year in which the disposal is made.
Propose a change(1) This section applies where— (a) there is a reorganisation within the meaning of section 126, (b) immediately before the reorganisation, a qualifying person holds ordinary shares which, in relation to that reorganisation, are original shares within the meaning of section 126, (c) on the reorganisation that person does not give or become liable to give any consideration for, or for any part of, a new holding, and (d) at a time after the reorganisation, there is a disposal of all or part of a new holding. (2) In this section a “new holding” means— (a) the holding that immediately after the reorganisation is (in relation to the original shares) the new holding within the meaning of section 126, or (b) where the new holding within the meaning of section 126 consists of two or more actual holdings, any of those actual holdings. (3) Subsections (4) and (5) apply for the purposes of determining (for any purpose of this Chapter) the status of shares that immediately before the disposal mentioned in subsection (1)(d) are in the new holding mentioned there (“the new holding concerned”). (4) Where a number of the original shares were— (a) subscribed for by the qualifying person, (b) issued on a particular date (“the relevant issue date”), and (c) held continuously by that person for a particular period ending immediately before the reorganisation (“the period concerned”), the following assumption is to be made. (5) That assumption is that an appropriate number of the new shares were— (a) subscribed for by the qualifying person, (b) issued on the relevant issue date, and (c) had by the time immediately after the reorganisation already been held continuously by that person for the period concerned. (6) In subsections (4) and (5)— “the appropriate number” has the meaning given by section 169VO; “the original shares” means the shares held by the qualifying person immediately before the reorganisation that were original shares in relation to the reorganisation; “the new shares” means the shares that immediately after the reorganisation were in the new holding concerned (including such, if any, of the original shares as remained after the reorganisation and were in that holding). (7) In this section a reference to the “status” of a share is to whether it is qualifying, potentially qualifying or excluded. (8) Section 169VE applies to determine, for the purposes of this Chapter, which shares are included in a holding immediately before a reorganisation as it applies for the purposes of determining which shares are included in a holding immediately before a particular disposal. (9) References in this section to consideration are to be read in accordance with section 128(2).
Propose a change(1) The “appropriate number” for the purposes of section 169VN(5) is the number found by multiplying the number of shares that are in the new holding concerned immediately after the reorganisation by the fraction— A B where— A is the number of the original shares that were— subscribed for by the qualifying person, issued on the relevant issue date, and continuously held by that person for the period concerned, and B is the total number of the original shares. (2) In this section— “the new holding concerned” has the meaning given by section 169VN(3); “the original shares” has the meaning given by section 169VN(6); “the relevant issue date” has the meaning given by section 169VN(4); “the period concerned” has the meaning given by section 169VN(4).
Propose a change(1) This section applies where— (a) there is a reorganisation within the meaning of section 126, (b) immediately before the reorganisation, a qualifying person holds ordinary shares which, in relation to that reorganisation, are original shares within the meaning of section 126, (c) on the reorganisation that person gives or becomes liable to give consideration for shares ( “ shares issued for consideration ”) which— (i) are issued to that person on the reorganisation, and (ii) immediately after the reorganisation are in a new holding, and (d) at a time after the reorganisation, there is a disposal of all or part of that new holding. (2) In this section a “new holding” means— (a) the holding that immediately after the reorganisation is (in relation to the original shares) the new holding within the meaning of section 126, or (b) where the new holding within the meaning of section 126 consists of two or more actual holdings, any of those actual holdings. (3) In determining, for any purpose of this Chapter, the status of shares that immediately before the disposal mentioned in subsection (1)(d) are in the new holding mentioned there— (a) the date of issue of the shares issued for consideration is to be taken to be their actual date of issue (rather than the date of issue of any of the original shares), and (b) in relation to any part of the new holding for which consideration was not given, sections 169VN(3) to (6) and 169VO apply but as if any reference to the new holding concerned were to that part of the new holding. (4) Section 169VN(3) to (6) and 169VO also apply in relation to any other holding which is a new holding in relation to the reorganisation and as respects which the person did not, on the reorganisation, give or become liable to give any consideration. (5) In this section a reference to the “status” of a share is to whether it is qualifying, potentially qualifying or excluded. (6) References in this section to consideration are to be read in accordance with section 128(2).
Propose a change(1) This section applies where section 135 applies in relation to an issue of shares in a company (“company B”) in exchange for shares in another company (“company A”). (2) For the purposes of sections 169VN to 169VP— (a) companies A and B are to be treated as if they were the same company, and (b) the exchange of shares is to be treated as if it were a reorganisation of that company's share capital.
Propose a change(1) This section applies where— (a) section 136 applies in relation to an arrangement between a company (“company A”) and the persons holding shares, or any class of shares, in company A, under which another company (“company B”) issues shares to those persons, and (b) under section 136(2)(a) those persons are treated as exchanging shares in company A for the shares held by them in consequence of the arrangement. (2) For the purposes of sections 169VN to 169VP— (a) companies A and B are to be treated as if they were the same company, and (b) the exchange of shares is to be treated as if it were a reorganisation of that company's share capital. (3) In the following provisions of this Chapter, any reference to an exchange of shares includes anything that section 136(2)(a) treats as an exchange of shares.
Propose a change(1) This section applies where— (a) an ordinary share (“the original share”) is subscribed for by a qualifying person (“the investor”); (b) the conditions in section 169VB(2)(c) and (d) are met in relation to the original share, (c) the share is involved in an exchange of shares treated under section 169VQ or 169VR as a reorganisation of share capital, and accordingly is included in the original shares within the meaning of section 169VN(6), and (d) subsequently there is a disposal of all or part of a holding of shares that in relation to that exchange is a new holding within the meaning given by section 169VN(2). (2) As respects a share which is in that holding immediately before that disposal, the conditions in section 169VB(2)(f) and (g) are to be regarded as met if (and only if)— (a) in relation to the period beginning with the issue of the original share and ending with the exchange of shares, those conditions were met by the original share, and (b) in relation to the period beginning with the exchange of shares and ending with the disposal, those conditions were met by a share representing the original share. (3) Accordingly— (a) in section 169VB(2)(f) and (g) as they apply to the original share, any reference to the share-holding period is to be read as to the period mentioned in subsection (2)(a) above, and (b) in section 169VB(2)(f) and (g) as they apply to a share representing the original share, any reference to the share-holding period is to be read as to the period mentioned in subsection (2)(b) above. (4) In subsection (1)(c) “the share” includes a share that, following a reorganisation or following an exchange of shares in relation to which section 169VQ or 169VR applies, represents the original share, and subsections (2) and (3) apply in such a case with the necessary modifications.
Propose a change(1) This section applies where— (a) there is— (i) a reorganisation (within the meaning of section 126), or (ii) an exchange of shares which is treated as such a reorganisation by virtue of section 135 or 136, and (b) the original shares and the new holding 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 investors' relief may be made as if the reorganisation or exchange of shares involved a disposal of the original shares; and if such a claim is made section 127 and sections 169VN to 169VS do not apply. (3) Any election under this section must be made— (a) if the reorganisation or exchange of shares would (apart from section 127) involve a disposal by the trustees of a settlement, jointly by— (i) the trustees, and (ii) the person who if the disposal were made would be the eligible beneficiary in respect of the disposal, within the meaning given by section 169VH(2) (or, if more than one, all the persons who would be such eligible beneficiaries); (b) otherwise, by the individual concerned. (4) Any 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 or exchange of shares takes place. (5) In this section “the original shares” and “the new holding” have the meaning given by section 126.
Propose a change(1) For the purposes of this Chapter (other than this subsection) a person “subscribes for” a share in a company if— (a) that person subscribes for the share, (b) the share is issued to that person by the company for consideration consisting wholly of cash, (c) the share is fully paid up at the time it is issued, (d) the share is subscribed for, and issued, for genuine commercial reasons and not as part of arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage to any person, and (e) the share is subscribed for, and issued, by way of a bargain at arm's length. (2) In subsection (1) “arrangements” and “tax advantage” have the same meaning as in section 16A. (3) If— (a) an individual (“A”) subscribed for, or is treated under this subsection as having subscribed for, any shares, (b) A transferred the shares to another individual (“B”) during their lives, and (c) A was living together with B as B's spouse or civil partner at the time of the transfer, B is to be treated for the purposes of this Chapter as having subscribed for the shares. (4) Accordingly, for the purposes of this Chapter any period for which A held the shares continuously is to be added to, and treated as part of, the period for which B held the shares continuously. (5) In this Chapter, apart from subsections (3) and (4), references to a person's having subscribed for a share include the person's having subscribed for the share jointly with any other person (and references to a person's holding a share or to a share being issued to a person are to be read accordingly).
Propose a change(1) In this Chapter “trading company” and “the holding company of a trading group” have the same meaning as in section 165 (see section 165A). (2) For the purposes of this Chapter a company is not to be regarded as ceasing to be a trading company, or the holding company of a trading group, merely because of anything done in consequence of— (a) the company, or any of its subsidiaries, being in administration or receivership, or (b) a resolution having been passed, or an order made, for the winding up of the company or any of its subsidiaries. (3) But subsection (2) applies only if— (a) the entry into administration or receivership, or the resolution or order for winding up, and (b) everything done as a result of the company concerned being in administration or receivership, or as a result of that resolution or order, is for genuine commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
Propose a change(1) This section applies to determine for the purposes of— (a) section 169VB(2)(g), or (b) section 169VH(2)(c), whether a particular person has at any time in the relevant period been a “relevant employee” in respect of the issuing company. (2) A person who has at any time in the relevant period been an officer or employee of— (a) the issuing company, or (b) a connected company, is to be regarded as having at that time been a relevant employee in respect of the issuing company, but this is subject to subsections (3) and (5). (3) If— (a) a person is an unremunerated director of the issuing company or a connected company at any time in the relevant period, and (b) the condition in subsection (4) is met, the fact that the person holds that directorship at that time does not make the person a relevant employee in respect of the issuing company at that time. (4) The condition referred to in subsection (3) is that at no time before the relevant period had the person mentioned in that subsection, or a person connected with that person, been— (a) connected with the issuing company, or (b) involved in carrying on (whether on the person's own account or as a partner, director or employee) the whole or any part of the trade, business or profession carried on by the issuing company or a company connected with that company. (5) If— (a) a person becomes an employee of the issuing company or a connected company at a time which is— (i) within the relevant period, but (ii) not within the first 180 days of that period, (b) at the beginning of the relevant period, there was no reasonable prospect that the person would become such an employee within the relevant period, and (c) the person is not at any time in the relevant period a director of the issuing company or a connected company, that employment of the person does not make the person a relevant employee in respect of the issuing company at any time in the relevant period. (6) For the purposes of subsection (5) there is a “reasonable prospect” of a thing if it is more likely than not. (7) In this section— “director” is to be read in accordance with section 452 of CTA 2010, “connected company” means a company which at any time in the relevant period is connected with the issuing company (and it does not matter for this purpose whether that time is a time when the person in question is an officer or employee of either company); “the issuing company” means the company mentioned in (as the case may be) section 169VB(2)(g) or section 169VH(2)(c); “the relevant period” means the period mentioned in (as the case may be) section 169VB(2)(g) or section 169VH(2)(c); “unremunerated director” has the meaning given by section 169VX.
Propose a change(1) For the purposes of section 169VW a person (“the person concerned”) is an “unremunerated director” of the issuing company or a connected company at a particular time in the relevant period if that person is a director of that company at that time and— (a) does not receive in the relevant period any disqualifying payment from the issuing company or a related person, and (b) is not entitled to receive any such payment in respect of that period or any part of it. (2) In this section “disqualifying payment” means any payment other than— (a) a payment or reimbursement of travelling or other expenses wholly, exclusively and necessarily incurred by the person concerned in the performance of his or her duties as a director, (b) any interest which represents no more than a reasonable commercial return on money lent to the issuing company or a related person, (c) any dividend or other distribution which does not exceed a normal return on the investment to which the dividend or distribution relates, (d) any payment for the supply of goods which does not exceed their market value, (e) any payment of rent for any property occupied by the issuing company or a related person which does not exceed a reasonable and commercial rent for the property, or (f) any necessary and reasonable remuneration which is— (i) paid for qualifying services that are provided to the issuing company or a related person in the course of a trade or profession carried on wholly or partly in the United Kingdom, and (ii) taken into account in calculating for tax purposes the profits of that trade or profession. (3) In this section a “related person” means— (a) a connected company of which the person concerned is a director, or (b) any person connected with the issuing company or with a company within paragraph (a). (4) In this section any reference to a payment to the person concerned includes a payment made to that person indirectly or to that person's order or for that person's benefit. (5) In this section “qualifying services” means services which are— (a) not secretarial or managerial services, and (b) not services of a kind provided by the person to whom they are provided. (6) In this section the following expressions have the same meaning as in section 169VW— “connected company”; “director”; “issuing company”; “relevant period”.
Propose a changeIn this Chapter— “employee” (except in the expression “relevant employee”, which is to be read in accordance with section 169VW) has the meaning given by section 4 of ITEPA 2003; “employment” has the meaning given by section 4 of ITEPA 2003; “exchange of shares” is to be read in accordance with section 169VR(3); “excluded share” has the meaning given by section 169VB; a “holding” of shares in a company means a holding of such shares which by virtue of section 104(1) is to be regarded as a single asset; “investors' relief” has the meaning given by section 169VA(3); “office” has the meaning given by section 5(3) of ITEPA 2003; “ordinary shares”, in relation to a company, means any shares forming part of the company's ordinary share capital (within the meaning given by section 989 of ITA 2007); “potentially qualifying share” has the meaning given by section 169VB; “qualifying person” has the meaning given by section 169VC(7); “qualifying share” has the meaning given by section 169VB; “subscribe” is to be read in accordance with section 169VU; “trading company” and “the holding company of a trading group” are to be read in accordance with section 169VV.
Propose a change(1) This section has effect for the interpretation of sections 171 to 181 except in so far as the context otherwise requires, and in those sections— (a) “profits” means income and chargeable gains, and (b) “trade” includes “vocation”, and includes also an office or employment. Until 6th April 1993 paragraph (b) shall have effect with the addition at the end of the words “or the occupation of woodlands in any context in which the expression is applied to that in the Income Tax Acts". (2) Except as otherwise provided— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) subsections (3) to (6) below apply to determine whether companies form a group and, where they do, which is the principal company of the group; (c) in applying section 1154(3) of CTA 2010 (meaning of “75% subsidiary”) any share capital of a registered society (see section 1119 of that Act) shall be treated as ordinary share capital; and (d) “group” and “subsidiary” shall be construed with any necessary modifications where applied to a company incorporated under the law of a country outside the United Kingdom. (3) Subject to subsections (4) to (6) below— (a) a company (referred to below and in sections 171 to 181 as the “principal company of the group”) and all its 75 per cent. subsidiaries form a group and, if any of those subsidiaries have 75 per cent. subsidiaries, the group includes them and their 75 per cent. subsidiaries, and so on, but (b) a group does not include any company (other than the principal company of the group) that is not an effective 51 per cent. subsidiary of the principal company of the group. (4) A company cannot be the principal company of a group if it is itself a 75 per cent. subsidiary of another company. (5) Where a company (“the subsidiary”) is a 75 per cent. subsidiary of another company but those companies are prevented from being members of the same group by subsection (3)(b) above, the subsidiary may, where the requirements of subsection (3) above are satisfied, itself be the principal company of another group notwithstanding subsection (4) above unless this subsection enables a further company to be the principal company of a group of which the subsidiary would be a member. (6) A company cannot be a member of more than one group; but where, apart from this subsection, a company would be a member of 2 or more groups (the principal company of each group being referred to below as the “head of a group”), it is a member only of that group, if any, of which it would be a member under one of the following tests (applying earlier tests in preference to later tests)— (a) it is a member of the group it would be a member of if, in applying subsection (3)(b) above, there were left out of account any amount to which a head of a group is or would be beneficially entitled of any profits available for distribution to equity holders of a head of another group or of any assets of a head of another group available for distribution to its equity holders on a winding-up, (b) it is a member of the group the head of which is beneficially entitled to a percentage of profits available for distribution to equity holders of the company that is greater than the percentage of those profits to which any other head of a group is so entitled, (c) it is a member of the group the head of which would be beneficially entitled to a percentage of any assets of the company available for distribution to its equity holders on a winding-up that is greater than the percentage of those assets to which any other head of a group would be so entitled, (d) it is a member of the group the head of which owns directly or indirectly a percentage of the company’s ordinary share capital that is greater than the percentage of that capital owned directly or indirectly by any other head of a group (interpreting this paragraph as if it were included in section 1154(2) of CTA 2010). (7) For the purposes of this section and sections 171 to 181, a company (“the subsidiary”) is an effective 51 per cent. subsidiary of another company (“the parent”) at any time if and only if— (a) the parent is beneficially entitled to more than 50 per cent. of any profits available for distribution to equity holders of the subsidiary; and (b) the parent would be beneficially entitled to more than 50 per cent. of any assets of the subsidiary available for distribution to its equity holders on a winding-up. (8) Chapter 6 of Part 5 of CTA 2010 (group relief: equity holders and profits or assets available for distribution) applies for the purposes of subsections (6) and (7) as if— (a) references to section 151(4)(a) and (b) of that Act were references to subsections (6) and (7) above, ... (aa) in section 158 of that Act after subsection (2) there were inserted— (2A) But for those purposes a person carrying on a business of banking is not treated as a loan creditor of a company in respect of any loan capital or debt issued or incurred by the company for money lent by the person to the company in the ordinary course of that business. , and (b) sections 171(1)(b) and (3), 173, 174 and 176 to 178 of that Act were omitted. (9) For the purposes of this section and sections 171 to 181, references to a company apply only to— (a) a company as defined in section 1(1) of the Companies Act 2006 (c. 46), and (b) a company (other than a limited liability partnership) which is constituted under any other Act or a Royal Charter or letters patent or ... is formed under the law of a country or territory outside the United Kingdom, and (c) a registered society (see section 1119 of CTA 2010) ... ; and (cc) an incorporated friendly society within the meaning of the Friendly Societies Act 1992; and (d) a building society. (10) For the purposes of this section and sections 171 to 181, a group remains the same group so long as the same company remains the principal company of the group, and if at any time the principal company of a group becomes a member of another group, the first group and the other group shall be regarded as the same, and the question whether or not a company has ceased to be a member of a group shall be determined accordingly. (10A) Where the principal company of a group (Group 1)— (a) becomes an SE by reason of being the acquiring company in the formation of an SE by merger by acquisition (in accordance with Articles 2(1), 17(2)(a) and 29(1) of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)), (b) becomes a subsidiary of a holding SE (formed in accordance with Article 2(2) of that Regulation), or (c) is transformed into an SE (in accordance with Article 2(4) of that Regulation), Group 1 and any group of which the SE is a member on formation shall be regarded as the same; and the question whether or not a company has ceased to be a member of a group shall be determined accordingly. (11) For the purposes of this section and sections 171 to 181, the passing of a resolution or the making of an order, or any other act, for the winding-up of a member of a group of companies shall not be regarded as the occasion of that or any other company ceasing to be a member of the group. (12) Sections 171 to 181, except in so far as they relate to recovery of tax, shall also have effect in relation to bodies from time to time established by or under any enactment for the carrying on of any industry or part of an industry, or of any undertaking, under national ownership or control as if they were companies within the meaning of those sections, and as if any such bodies charged with related functions (and in particular the Boards and Holding Company established under the Transport Act 1962 and the new authorities within the meaning of the Transport Act 1968 established under that Act of 1968) and subsidiaries of any of them formed a group, and as if also any 2 or more such bodies charged at different times with the same or related functions were members of a group. (13) Subsection (12) shall have effect subject to any enactment by virtue of which property, rights, liabilities or activities of one such body fall to be treated for corporation tax as those of another, including in particular any such enactment in Chapter VI of Part XII of the Taxes Act. (14) Sections 171 to 181, except in so far as they relate to recovery of tax, shall also have effect in relation to the Executive for a designated area within the meaning of section 9(1) of the Transport Act 1968 as if that Executive were a company within the meaning of those sections.
Propose a change(1) Where— (a) a company (“company A”) disposes of an asset to another company (“company B”) at a time when both companies are members of the same group, and (b) the conditions in subsection (1A) below are met, company A and company B are treated for the purposes of corporation tax on chargeable gains as if the asset were acquired by company B for a consideration of such amount as would secure that neither a gain nor a loss would accrue to company A on the disposal. (1A) The conditions referred to in subsection (1)(b) above are— (a) that company A is resident in the United Kingdom at the time of the disposal, or the asset is a chargeable asset in relation to that company immediately before that time, and (b) that company B is resident in the United Kingdom at the time of the disposal, or the asset is a chargeable asset in relation to that company immediately after that time. For this purpose an asset is a “chargeable asset” in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain chargeable to corporation tax as a result of section 2B(3) or (4). (1B) If— (a) company A is deemed under section 25(3) to have previously disposed of the asset, but (b) no gain or loss accrued on that deemed disposal as a result of section 25ZA(2), that deemed disposal is to be ignored in applying subsection (1) of this section in relation to company B. (2) Subsection (1) above shall not apply where the disposal is— (a) a disposal of a debt due from company B effected by satisfying the debt or part of it; or (b) a disposal of redeemable shares in a company on the occasion of their redemption; or (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) a disposal by or to an investment trust; or (cc) a disposal by or to a venture capital trust; or (cd) a disposal by or to a qualifying friendly society; or (d) a disposal to a dual resident investing company; ... ; or (da) a disposal by or to a company which is, or is a member of, a UK REIT within the meaning of Part 12 of CTA 2010 (Real Estate Investment Trusts); or (db) a disposal by company A in fulfilment of its obligations under an option granted to company B at a time when those companies were not members of the same group; (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and the reference in subsection (1) above to company A disposing of an asset shall not apply to anything which under section 122 is to be treated as a disposal of an interest in shares in a company in consideration for a capital distribution (as defined in that section) from that company, whether or not involving a reduction of capital. (3) Subsection (1) above shall not apply to a transaction treated by section 127 as it applies by virtue of section 135 as not involving a disposal by company A. (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) For the purposes of subsection (1) above, so far as the consideration for the disposal consists of money or money’s worth by way of compensation for any kind of damage or injury to assets, or for the destruction or dissipation of assets or for anything which depreciates or might depreciate an asset, the disposal shall be treated as being to the person who, whether as an insurer or otherwise, ultimately bears the burden of furnishing that consideration. (5) In subsection (2)(cd) above “qualifying friendly society” means a company which is a qualifying society for the purposes of section 165 of the Finance Act 2012 (incorporated friendly societies entitled to exemption from income tax and corporation tax on certain profits). (6) Subsection (1) above applies notwithstanding any provision in this Act fixing the amount of the consideration deemed to be received on a disposal or given on an acquisition. But where it is assumed for any purpose that a member of a group of companies has sold or acquired an asset, it shall be assumed also that it was not a sale or acquisition to which this section applies.
Propose a change(1) This section applies where— (a) a chargeable gain or an allowable loss accrues to a company (“company A”) in respect of an asset (or would so accrue but for an election under this section), (b) at the time of accrual, company A and another company (“company B”) are members of the same group, and (c) had company A disposed of the asset to company B immediately before the time of accrual, section 171(1) would have applied. (2) In determining for the purposes of subsection (1)(c) whether subsection (1) of section 171 would have applied, it is to be assumed that subsection (1A)(b) of that section read— (b) that— (i) at the time of the disposal, company B is resident in the United Kingdom, or carrying on a trade in the United Kingdom through a permanent establishment there, or (ii) the asset is a chargeable asset in relation to company B immediately after the time of the disposal. (3) In this section “the time of accrual” means the time the chargeable gain or allowable loss accrues to company A (or would so accrue but for an election under this section). (4) Companies A and B may make a joint election to transfer the chargeable gain or allowable loss, or such part of it as is specified in the election, from company A to company B (but see subsection (4A)). (4A) An election may not be made under this section to transfer the whole or part of a ring fence chargeable gain from a company carrying on a ring fence trade to a company not carrying on such a trade. (4B) In subsection (4A)— “ring fence chargeable gain”, in relation to a company, means— a chargeable gain accruing to the company on a material disposal within the meaning of section 197 (disposals of interests in oil fields etc: ring fence provisions), or a chargeable gain treated as accruing to the company by virtue of section 197(4); “ring fence trade” has the same meaning as in Part 8 of CTA 2010 (see section 277 of that Act). (5) An election under this section must be made— (a) by notice to an officer of Revenue and Customs, and (b) no later than two years after the end of the accounting period of company A in which the time of accrual falls. (6) An election, or two or more elections made simultaneously, is or are of no effect if, taken together with each earlier election (if any) made in respect of the same gain or loss, it or they would (apart from this subsection) have effect in relation to an amount exceeding the gain or loss. (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) For the effect of an election under this section, see section 171B.
Propose a change(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 chargeable to corporation tax as a result of section 2B(3) or (4). (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.
Propose a change(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 118 of the Finance Act 2012 (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 held for the purposes of the company's long-term business. (4) The chargeable gain or allowable loss treated as accruing to company B as a result of the election is to be treated for the purposes of section 210A (ring-fencing of losses) as a non-BLAGAB chargeable gain or (as the case may be) a non-BLAGAB allowable loss. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change