Finance Act 1978

2 (1) In section 56 of the Finance Act 1976 for subsection (1) there shall be substituted—

“(1) Where—

(a) a close company within the meaning of section 90 below disposes of an asset to trustees in circumstances such that the disposal is a disposition which by virtue of that section is not a transfer of value for the purposes of capital transfer tax; or

(b) an individual disposes of an asset to trustees in circumstances such that the disposal is an exempt transfer by virtue of section 67 of the Finance Act 1978,

Part III of the Finance Act 1965 (capital gains tax) shall have effect in relation to the disposal in accordance with subsections (2) and (3) below.”

(2) In, subsection (6) of that section for the words from " any participator who " to " assets " there shall be substituted the words “any participator who—

(a) is not beneficially entitled to, or to rights entitling him to acquire, 5 per cent. or more of, or of any class of the shares comprised in, its issued share capital; and

(b) on a winding-up of the company would not be entitled to 5 per cent. or more of its assets ;”

and at the end there shall be inserted the words " or, if the trusts are those of a profit sharing scheme approved under the Finance Act 1978, of any power to appropriate shares in pursuance of the scheme. "

(3) These amendments apply in relation to any disposal made on or after 11th April 1978.