Income Tax Act 2007 (c. 3)

Part 13 U.K. Tax avoidance

Chapter 1 U.K. Transactions in securities

Circumstances in which income tax advantages obtained or obtainable U.K.

687 Deductions from profits obtained following distribution or dealings (circumstance B) U.K.

(1) This section applies in relation to a person if subsections (2) to (4) apply.

(2) The person becomes entitled—

(a) in respect of securities held or sold by the person, or

(b) in respect of securities formerly held by the person,

to a deduction in calculating profits or gains.

(3) The entitlement arises in connection with—

(a) the purchase of securities where the purchase is followed by the sale of the same or other securities,

(b) the sale of securities where the sale is followed by the purchase of the same or other securities,

(c) the distribution, transfer or realisation of assets of a company, or

(d) the application of such assets in discharge of liabilities.

(4) The entitlement arises because of a fall in the value of the securities resulting from—

(a) the payment of a dividend on them, or

(b) any other dealing with any assets of a company.

(5) Subsection (2)(b) applies whether or not the person has sold the securities.