Finance Act 1988

Section 97.

SCHEDULE 9 Deferred Charges on Gains Before 31st March 1982

Reduction of deduction or gain

1 Where this Schedule applies—

(a) in a case within paragraph 2 below, the amount of the deduction referred to in that paragraph, and

(b) in a case within paragraph 3 below, the amount of the gain referred to in that paragraph,

shall be one half of what it would be apart from this Schedule.

Charges rolled-over or held-over

2 (1) Subject to sub-paragraph (2) below, this Schedule applies on a disposal, not being a no gain/no loss disposal, of an asset on or after 6th April 1988 if—

(a) the person making the disposal acquired the asset after 31st March 1982,

(b) a deduction falls to be made by virtue of any of the enactments specified in sub-paragraph (3) below from the expenditure which is allowable in computing the amount of any gain accruing on the disposal, and

(c) the deduction is attributable (whether directly or indirectly and whether in whole or in part) to a chargeable gain accruing on the disposal before 6th April 1988 of an asset acquired before 31st March 1982 by the person making that disposal.

(2) This Schedule does not apply where, by reason of the previous operation of this Schedule, the amount of the deduction is less than it otherwise would be.

(3) The enactments referred to in sub-paragraph (1) above are—

(a) section 21(4) and (5) of the [1979 c. 14.] Capital Gains Tax Act 1979 (roll-over where replacement asset acquired after receipt of compensation or insurance money);

(b) section 111A of that Act (roll-over where replacement land acquired on compulsory acquisition of other land);

(c) section 115 of that Act (roll-over where replacement asset acquired on disposal of business asset);

(d) section 123 of that Act (roll-over where shares acquired on disposal of business to company);

(e) section 126 of that Act (hold-over where business asset acquired by gift); and

(f) section 79 of the [1980 c. 48.] Finance Act 1980 (hold-over where asset acquired by gift).

Postponed charges

3 (1) Subject to sub-paragraph (3) below, this Schedule applies where—

(a) by virtue of any of the enactments specified in sub-paragraph (2) below a gain is treated as accruing in consequence of an event occurring on or after 6th April 1988, and

(b) the gain is attributable (whether directly or indirectly and whether in whole or in part) to the disposal before 6th April 1988 of an asset acquired before 31st March 1982 by the person making that disposal.

(2) The enactments referred to in sub-paragraph (1) above are—

(a) section 268A of the Taxes Act 1970 (postponement of charge where securities acquired in exchange for business acquired by non-resident company);

(b) section 278(3) of that Act (charge on company leaving group in respect of asset acquired from another member of same group);

(c) section 84 of the [1979 c. 14.] Capital Gains Tax Act 1979 (postponement of charge where gilts acquired on compulsory acquisition of shares);

(d) section 111B(3) of that Act (postponement of charge where depreciating asset acquired on compulsory acquisition of land);

(e) section 117(2) of that Act (postponement of charge where depreciating asset acquired as replacement for business asset);

(f) section 79 of the [1981 c. 35.] Finance Act 1981 (activation of charge rolled-over under section 79 of the Finance Act 1980 on emigration of donee); and

(g) paragraph 10 of Schedule 13 to the [1984 c. 43.] Finance Act 1984 (postponement of charge on reorganisation etc. involving acquisition of qualifying corporate bonds).

(3) Where a gain is treated as accruing by virtue of section 278(3) of the Taxes Act 1970 this Schedule applies only if the asset was acquired by the chargeable company (within the meaning of section 278) before 6th April 1988.

Previous no gain/no loss disposals

4 Where—

(a) a person makes a disposal of an asset which he acquired on or after 31st March 1982, and

(b) the disposal by which he acquired the asset and any previous disposal of the asset on or after 31st March 1982 was a no gain/no loss disposal,

he shall be treated for the purposes of paragraphs 2(1)(c) and 3(1)(b) above as having acquired the asset before 31st March 1982.

5 (1) Sub-paragraph (2) below applies where—

(a) on or after 6th April 1988 a person makes a disposal of an asset which he acquired on or after 31st March 1982,

(b) the disposal by which he acquired the asset was a no gain/no loss disposal, and

(c) a deduction falling to be made as mentioned in paragraph (b) of sub-paragraph (1) of paragraph 2 above which was attributable as mentioned in paragraph (c) of that sub-paragraph was made—

(i) on that disposal, or

(ii) where one or more earlier no gain/no loss disposals of the asset have been made on or after 31st March 1982 and since the last disposal of the asset which was not a no gain/no loss disposal, on any such earlier disposal.

(2) Where this sub-paragraph applies the deduction shall be treated for the purposes of paragraph 2 above as falling to be made on the disposal mentioned in sub-paragraph (1)(a) above and not on the no gain/no loss disposal.

6 For the purposes of this Schedule “no gain/no loss disposal” has the same meaning as in paragraph 1 of Schedule 8 to this Act.

Assets derived from other assets

7 The references in paragraphs 2(1)(c) and 3(1)(b) above to the disposal of an asset acquired by a person before 31st March 1982 include references to the disposal of an asset which was not acquired by the person before that date if its value is derived from another asset which was so acquired and of which account is to be taken in relation to the disposal under section 36 of the [1979 c. 14.] Capital Gains Tax Act 1979.

Claims

8 (1) No relief shall be given under this Schedule unless a claim is made—

(a) in the case of a gain treated as accruing by virtue of section 278(3) of the Taxes Act 1970 to a company which ceases to be a member of a group, within the period of two years beginning at the end of the accounting period which ends when the company ceases to be a member of the group,

(b) in any other case, within the period of two years beginning at the end of the year of assessment or accounting period in which the disposal in question is made, or the gain in question is treated as accruing,

or within such longer period as the Board may by notice in writing allow.

(2) A claim under sub-paragraph (1) above shall be supported by such particulars as the inspector may require for the purpose of establishing entitlement to relief under this Schedule and the amount of relief due.