16(1)In any case where—
(a)an individual makes a material disposal of business assets, and
(b)the subject matter of that disposal (whether business, assets or shares or securities) was acquired, in whole or in part, from that individual’s spouse, and
(c)that acquisition was either under the will or intestacy of the spouse or by way of lifetime gift and in the year of assessment in which occurred the spouse’s death or, as the case may be, the lifetime gift, the individual and his spouse were living together, and
(d)as a result of the acquisition the individual acquired the whole of the interest in the business, assets, shares or securities concerned which, immediately before the acquisition or, as the case may be, the spouse’s death, was held by the spouse, and
(e)not later than two years after the end of the year of assessment in which the material disposal occurred, the individual elects that this paragraph should apply,
the period which, apart from this paragraph, would be the qualifying period appropriate to that disposal shall be extended by assuming that, in the conditions which under section 69 of this Act are the relevant conditions applicable to the disposal, any reference to the individual were a reference either to the individual or his spouse.
(2)An election under sub-paragraph (1)(e) shall be made by notice in writing to the inspector.
(3)Where the acquisition referred to in sub-paragraph (1)(c) above was by way of lifetime gift, the amount available for relief on the material disposal concerned, having regard to the extension of the qualifying period under sub-paragraph (1) above, shall not exceed [F1the limit] specified in sub-paragraph (4) below.
(4)The [F1limit] referred to in sub-paragraph (3) above [F1is]—
[F2(a)the amount by which [F3£125,000] exceeds the amount of relief given under this Schedule on disposals made by the spouse up to and including the disposal by way of lifetime gift referred to in sub-paragraph (1)(c) above and on trustees’ disposals in respect of which the spouse was the qualifying beneficiary; and]
(b)the amount which would have been available for relief on the material disposal if—
(i)the lifetime gift had not occurred; and
(ii)the material disposal had been made by the spouse; and
(iii)anything done by the individual in relation to the business concerned after the lifetime gift was in fact made had been done by the spouse.
[F2(5)In sub-paragraph (4)(a) above, the reference to relief given under this Schedule includes a reference to relief given under section 34 of the M1Finance Act 1965 or section 124 of the M2Capital Gains Tax Act 1979.]
Textual Amendments
F1Finance Act 1988 (c. 39,SIF 63:1, 2), s. 110(6) for qualifying disposals occurring on or after 6 April 1988. Previously “which ever is the lower of the two limits”, “limits” and “are”.
F2Finance Act 1988 (c. 39, SIF 63:1, 2), s. 96, Sch. 8 para. 11 in relation to disposals on or after 6th April 1988, previously “(5)Subsection (4) above applies to a disposal—(a) which occurs on or after 6th April 1985 or, in the case of a disposal by a company, 1st April 1985; and(b) in respect of which a claim is made that subsection (4) above should apply(a) and a claim under paragraph (b) above shall be made within the period of two years beginning at the end of the year of assessment or accounting period in which the disposal occurs or within such longer period as the Board may by notice in writing allow.” Finance Act 1988 (c. 39, SIF 63:1, 2), s. 62(4)–disposals of oil licences relating to underdeveloped areas.
F3Finance Act 1987 s. 47 for qualifying disposals occuring on or after 6 April 1987. Previously £100,000
Marginal Citations