Finance (No. 2) Act 1992

5 (1) Sub-paragraph (3) below applies to any disposal of an asset which is effected, and sub-paragraphs (4) to (6) below apply to any lease which is granted, in pursuance of a provision included in the transfer scheme by virtue of Article 70(1)(c) of the Order (scheme may require successor company to enter into arrangements in favour of any other successor company). U.K.

(2) Sub-paragraph (3) below also applies to any disposal of an asset which is effected in pursuance of an agreement under paragraph 3(2) of Schedule 10 to the Order and which is either the grant of a lease of land or the creation of other liabilities and rights over land.

(3) A disposal to which this sub-paragraph applies shall be taken for the purposes of corporation tax on chargeable gains to be effected for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the successor company making the disposal.

(4) Section 38(1)(a) and (4) of the Taxes Act 1988 (rules for ascertaining duration of leases) shall be disregarded in determining for the purposes of [F1 section 290 of the Capital Allowances Act 2001 (election to treat grant of lease exceeding 50 years as sale)] whether a lease to which this sub-paragraph applies is a [F2 lease which satisfies the condition in subsection (1)(c)] of that section; in relation to any such lease which is, on that basis, such a long lease—

(a) the lessee shall be deemed for the purposes of that section to have paid in consideration for the grant of the lease a capital sum of an amount equal to the residue of expenditure immediately before the lease takes effect, computed in accordance with [F3 Chapter 8 of Part 3] of that Act, and

(b) [F4 section 291(1)] of that Act shall be disregarded;

and [F5 sections 567 to 570] of that Act shall not apply in relation to the grant of a lease in respect of which, by virtue of this sub-paragraph, an election is made under [F6 section 290] of that Act.

(5) Where the conditions in [F7 section 183(1)(a) and (b) of the Capital Allowances Act (incoming lessee where lessor entitled to allowances)] are fulfilled in relation to a lease to which this sub-paragraph applies—

(a) the lessee shall be deemed to have given as consideration for the lease a capital sum which falls to be treated for the purposes of [F8 Part 2 of that Act] as expenditure on the provision of the fixture concerned; [F9 and]

(b) the amount of that capital sum shall be equal to the amount of expenditure which is attributed to the fixture concerned for the purposes of apportioning, in accordance with the transfer scheme, expenditure by reference to which capital allowances may be made;. . .

F10 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Section 38(1)(a) and (4) of the Taxes Act 1988 shall be disregarded in ascertaining for the purposes of section 35 of that Act (Schedule D charge on assignment of lease granted at an undervalue) the duration of a lease to which this sub-paragraph applies.

(7) Subject to the repeals made by the M1 Taxation of Chargeable Gains Act 1992, in section 68(7A) of the M2 Finance Act 1985 (modification of indexation allowance: list of no gain/no loss provisions) there shall be added after paragraph (i) the words “and

(j) paragraph 5(3) of Schedule 17 to the Finance (No. 2) Act 1992.”

(8) Subject to the repeals made by the M3 Taxation of Chargeable Gains Act 1992, in paragraph 1(3) of Schedule 8 to the Finance Act 1988 (rebasing to 1982: list of no gain/no loss provisions) there shall be added after paragraph (i) the words “and

(j) paragraph 5(3) of Schedule 17 to the Finance (No. 2) Act 1992.”

F11 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Words in Sch. 17 para. 5(4) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(1)(a)

F2 Words in Sch. 17 para. 5(4) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(1)(b)

F3 Words in Sch. 17 para. 5(4)(a) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(1)(c)

F4 Words in Sch. 17 para. 5(4)(b) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(1)(d)

F5 Words in Sch. 17 para. 5(4) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(1)(e)

F6 Words in Sch. 17 para. 5(4) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(1)(f)

F7 Words in Sch. 17 para. 5(5) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(2)(a)

F8 Words in Sch. 17 para. 5(5) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(2)(b)

F9 Words in Sch. 17 para. 5(5) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 579(1), Sch. 2 para. 87(2)(c)

F10 Sch. 17 para. 5(4)(c) and word “and" immediately preceding it repealed (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, ss. 578, 580, 579(1), Sch. 2 para. 87(2)(d), Sch. 4

F11 Sch. 17 para. 5(9) omitted (21.7.2008) (with effect in accordance with Sch. 2 para. 71 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 70(a)(iii)

Marginal Citations

M1 1992 c. 12.

M2 1985 c. 54.

M3 1992 c. 12.