Finance Act 1998

SCHEDULE 21 Amendments in connection with taper relief

Section 121. Introductory 1 The Taxation of Chargeable Gains Act 1992 shall be amended in accordance with the following provisions of this Schedule. Gains of trustees attributed to settlor 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual exempt amount 3 For subsection (5) of section 3 (definition of taxable amount) there shall be substituted the following subsections— (5) For the purposes of this section an individual’s taxable amount for any year of assessment is the amount which, after— (a) making every deduction for which section 2(2) provides, (b) applying any reduction in respect of taper relief under section 2A, and (c) adding any amounts falling to be added by virtue of section 2(5)(b), is (apart from this section) the amount for that year on which that individual is chargeable to capital gains tax in accordance with section 2. (5A) Where, in the case of any individual, the amount of the adjusted net gains for any year of assessment is equal to or less than the exempt amount for that year, no deduction shall be made for that year in respect of— (a) any allowable losses carried forward from a previous year; or (b) any allowable losses carried back from a subsequent year in which the individual dies. (5B) Where, in the case of any individual, the amount of the adjusted net gains for any year of assessment exceeds the exempt amount for the year, the deductions made for that year in respect of allowable losses falling within subsection (5A)(a) or (b) above shall not be greater than the excess. (5C) In subsections (5A) and (5B) above the references, in relation to any individual’s case, to the adjusted net gains for any year are references to the amount given in his case by— (a) taking the amount for that year from which the deductions for which section 2(2)(a) and (b) provides are to be made; (b) deducting only the amounts falling to be deducted in accordance with section 2(2)(a); and (c) in a year in which any amount falls to be brought into account by virtue of section 2(5)(b), adding whichever is the smaller of the exempt amount for that year and the amount falling to be so brought into account. Gains attributed to members of non-resident companies 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry back of losses on death 5 In section 62 (general provisions about death), the following subsections shall be inserted after subsection (2)— (2A) Amounts deductible from chargeable gains for any year in accordance with subsection (2) above shall not be so deductible from any such gains so far as they are gains that are brought into account for that year by virtue of section 2(5)(b). (2B) Where deductions under subsection (2) above fall to be made from the chargeable gains for any year, the provisions of this Act relating to taper relief shall have effect as if those deductions were deductions under section 2(2)(a) and (b) and, accordingly, as if— (a) those deductions were to be made (before the application of the relief) in computing for that year the excess (if any) mentioned in section 2A(1); and (b) for the purpose of determining the gains represented in that excess, the gains for that year from which those deductions are treated as made were to be ascertained in accordance with section 2A(6). Gains attributed to settlors and beneficiaries 6 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gains on assets deriving from reorganisation of body carrying on a mutual business etc. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commercial letting of furnished holiday dwellings 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delayed remittances in respect of foreign assets 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .