The Enactment of Extra-Statutory Concessions Order 2010

Disposals of assets derived from larger holdings: valuation as at 31st March 1982

7.—(1) The Taxation of Chargeable Gains Act 1992(1) is amended as follows.

(2) In section 55(6) (disposal of assets acquired by no gain/no loss disposals since 31st March 1982), omit the “and” at the end of paragraph (a) and after that paragraph insert—

“(aa) in the case of a disposal to which paragraph 1A of Schedule 3 applies (certain holdings of shares or securities), the market value of the asset on that date is to be determined in accordance with that paragraph; and”.

(3) In Schedule 3 (assets held on 31st March 1982), after paragraph 1 insert—

“1A.— (1)  This paragraph applies where—

(a) paragraph 1(1) applies to a disposal of shares in or securities of a company that are of a class,

(b) accordingly, the shares or securities constitute or form part of a holding which the person making the disposal (“P”) is treated as having held on 31st March 1982 (“the deemed 1982 holding”),

(c) the disposal by which P acquired the shares or securities, and any previous disposal of them after 31st March 1982, was a disposal to which section 171(1) (transfers within a group) applied,

(d) some or all of the shares or securities constituting the deemed 1982 holding were in fact held on 31st March 1982 by a person other than P, and

(e) in the hands of that person on that date they formed part of a holding which—

(i) consisted of shares or securities of the same class as the shares or securities disposed of, and

(ii) was larger than the deemed 1982 holding.

(2) If P makes a claim, then for the purposes of section 35(2) the market value on 31st March 1982 of the shares or securities disposed of is to be treated as being—

where—

• VLH is the market value on 31st March 1982 of the larger holding mentioned in sub-paragraph (1)(e) (in the hands of the person who in fact held it on that date),

• NDO is the number of shares or securities disposed of, and

• NLH is the number of shares or securities comprised in the larger holding on that date.

(3) Sub-paragraph (4) applies where sub-paragraph (1)(d) and (e) are met by two or more persons holding the shares or securities as two or more holdings or parts of holdings (“the original holdings”).

(4) Sub-paragraph (2) applies for the purpose of calculating the market value on 31st March 1982 of the shares or securities disposed of, except that—

(a) VLH is the market value on 31st March 1982 of the largest of the original holdings, and

(b) NLH is the number of shares or securities comprised in that holding.

(5) A claim under sub-paragraph (2) must be made on or before the second anniversary of the end of the accounting period of P in which the disposal takes place.

(6) Shares in or securities of a company shall not be treated as being of the same class unless they are so treated by the practice of a recognised stock exchange or would be so treated if dealt with on a recognised stock exchange.”.

(4) The amendments made by this article have effect in relation to disposals made on or after 1st April 2010.

(1)

1992 c. 12