68Exit event Z: a relevant disposal at an undervalueU.K.
(1)This section applies for the purposes of—
section 66(4)(c) (definition of exit event Z),
section 69 (consequences of a chargeable event: exit event Z), and
section 70 (valuation of the “disposed rights”).
(2)A “relevant disposal” means a disposal by C directly or indirectly to a third party (“TP”) of rights to guaranteed income under the guaranteed income agreement.
(3)The “disposed rights” are the rights to guaranteed income under the guaranteed income agreement which are the object of the relevant disposal.
(4)A relevant disposal is at an undervalue where the amount of the disposal consideration (“V1”) is less than the value of the disposed rights immediately before the disposal calculated in accordance with section 70 (“V2”).
(5)It does not matter whether the disposed rights are disposed of alone or as part of a larger disposal.
(6)Where the disposed rights are disposed of as part of a larger disposal, the amount of the disposal consideration for the larger disposal which is attributable to the relevant disposal is to be determined on such basis as is just and reasonable.
(7)In this section—
“disposal” means any surrender, giving up, assignment or other disposal;
“disposal consideration”, in relation to a disposal, means the amount of the consideration for the disposal brought into account as income of the relevant trade by C at the date of that disposal;
“third party” means a person who is not the principal company or a 75% subsidiary of the principal company.
(8)This section is deemed to have come into force on 2nd December 2004.