[F191GShares beginning or ceasing to be subject to section 91A or 91BU.K.
(1)Where at any time on or after 16th March 2005 the conditions in section 91A(1) or 91B(1) above become satisfied in the case of any share, otherwise than in the circumstances described in subsection (3) below, the investing company shall be deemed for the purposes of the Taxation of Chargeable Gains Act 1992—
(a)to have disposed of the share immediately before that time for a consideration of an amount equal to its fair value at that time, and
(b)to have immediately reacquired it for a consideration of the same amount.
(2)Where at any time the conditions in section 91A(1) or 91B(1) above cease to be satisfied in the case of any share, the investing company shall be deemed for the purposes of the Taxation of Chargeable Gains Act 1992 and of this Chapter—
(a)to have disposed of the share immediately before that time for a consideration of an amount equal to its fair value at that time, and
(b)to have immediately reacquired it for a consideration of the same amount.
(3)In any case where—
(a)a share is held by a company both—
(i)at the end of 15th March 2005, and
(ii)at the beginning of 16th March 2005, and
(b)the conditions in section 91A(1) or 91B(1) above are satisfied in relation to that share at the beginning of 16th March 2005,
subsection (4) below applies.
(4)In any such case, section 116 of the Taxation of Chargeable Gains Act 1992 (reorganisations etc involving qualifying corporate bonds) shall have effect in accordance with—
(a)the assumptions in subsections (5) and (6) below, and
(b)the provisions of subsections (7) and (8) below.
(5)The first of the assumptions is that the share became an asset representing a creditor relationship of the company (and, accordingly, a qualifying corporate bond) in consequence of the occurrence on 16th March 2005 of a transaction such as is mentioned in section 116(1) of the Taxation of Chargeable Gains Act 1992.
(6)The remaining assumptions are that, in relation to the transaction deemed to have occurred as mentioned in subsection (5) above,—
(a)the share immediately before 16th March 2005 shall be assumed to be the old asset for the purposes of section 116 of the Taxation of Chargeable Gains Act 1992, and
(b)the asset representing a creditor relationship immediately after the beginning of 16th March 2005 shall be assumed for those purposes to be the new asset.
(7)Where—
(a)subsection (3) above has effect in the case of any share, but
(b)the conditions in section 91A(1) or 91B(1) above cease to be satisfied in the case of the share at any time on or before 31st December 2005,
subsection (8) below applies.
(8)In any such case—
(a)the deemed disposal of the share at that time by virtue of subsection (2)(a) above shall not be regarded as a disposal for the purposes of subsection (10)(b) or (c) of section 116 of the Taxation of Chargeable Gains Act 1992, but
(b)the share shall continue to be the new asset for the purposes of that section.]
Textual Amendments
F1S. 91G inserted (with effect in accordance with Sch. 7 para. 10(7) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 10(6)