Finance Act 1982

[F1 Subsequent disposals following no-gain/no-loss disposals] U.K.

Textual Amendments

F1 Sch. 13 para. 3 repealed by Finance Act 1985 (c. 54), ss. 68, 98(6), Schs. 19 Pt. I and 27 Pt. VII for disposals made on or after 6 April 1985 or 1 April 1985 for companies, 2 July 1986 for gilt-edged securities (Capital Gains Tax Act 1979 (c. 14, SIF 63:2) Sch. 2) and qualifying corporate bonds (Finance Act 1984 (c. 43, SIF 40:1) s. 64), or 28 February 1986 for other securities within the meaning of Finance Act 1985 (c. 54) Part II Ch. IV

3 (1) The provisions of this paragraph apply in relation to a disposal by the transferee of the asset acquired by him on a disposal to which paragraph 2 above applies; and in this paragraph—

(a) “the initial disposal” means the disposal to which paragraph 2 above applies;

(b) “the subsequent disposal” means the disposal to which this paragraph applies; and

(c) “the transferor” and “the transferee” have the same meaning as in paragraph 2 above.

(2) If the subsequent disposal is one on which a loss accrues (and, accordingly, is one to which section 86 of this Act does not apply) then, for the purposes of the M1 Capital Gains Tax Act 1979, the amount of that loss shall be taken to be reduced by—

(a) an amount equal to the indexation allowance (if any) on the initial disposal; or

(b) such an amount as will secure that, on the subsequent disposal, neither a gain nor a loss accrues,

whichever is the less.

(3) The following provisions of this paragraph apply where the initial disposal is one to which paragraph 2 above applies by reason only of any of the following enactments applying to the initial disposal, namely—

(a) section 267 or section 273 of [F2 the Taxes Act 1970]; or

(b) section 44 of the Capital Gains Tax Act 1979; or

(c) section 148 of this Act.

[F3 (d) subsection (4) of section 7 of the Finance (No. 2) Act 1983.]

[F4 (e) paragraph 2 of Schedule 2 to the Trustee Savings Banks Act 1985.]

(4) For the purpose of calculating the indexation allowance (if any) to which the transferee is entitled on the subsequent disposal in a case where the initial disposal falls within sub-paragraph (3) above and the transferor made that disposal outside the qualifying period,—

(a) subsection (1) of section 86 of this Act shall have effect with the omission of paragraph (b); and

(b) the indexed rise in any item of relevant allowable expenditure falling within section 32(1)(a) of the Capital Gains Tax Act 1979 shall be calculated as if, in the definition of RI in the formula in section 87(2) of this Act, the words “which is the twelfth month after that” were omitted, and as if section 87(3)(a) of this Act were also omitted.

(5) For the purpose of calculating the indexation allowance (if any) to which the transferee is entitled on the subsequent disposal in a case where the initial disposal falls within sub-paragraph (3) above and the transferor made that disposal within the qualifying period (so that he was not entitled to any indexation allowance) the transferor’s acquisition of the asset shall be treated as being the transferee’s acquisition of it.

(6) If, in a case where sub-paragraph (5) above applies, the subsequent disposal is itself a disposal to which paragraph 2 above applies, that sub-paragraph shall again apply so that the original transferor’s acquisition of the asset shall be treated as being the acquisition of it by the transferee under the subsequent disposal; and so on if there is a series of disposals to which paragraph 2 above applies, all occurring within twelve months of the first such disposal.

Textual Amendments

F2 Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

F3 Sch. 13 para. 3(3)(d) added by Finance (No. 2) Act 1983 (c. 49), s. 7(5) in relation to disposals on or after 6 April 1983 where the relevant date, as defined in s. 7(1) of that Act, falls after 1 January 1983

F4 Sch. 13 para. 3(3)(e) added by Trustee Savings Banks Act 1985 (c. 58), s. 5 and Sch. 2 para. 2(3)

Marginal Citations

M1 1979 c. 14.