Act repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with s. 201(3), Sch. 11 paras. 20, 22, 26(2), 27 and with saving in Sch. 11 para. 24(2)) and subject to an amendment (prosp.) by Museum and Galleries Act 1992 (c. 44), s. 11(2), Sch. 8 Pt. I para. 1(1)(2)(7), and amendments by: Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21), s. 4(2), Sch. 2 para. 9(1)(2) (in force 6.4.1992 by S.I. 1991/2617, art. 2(f)); S.I. 1991/2874, art. 2 (in force 6.4.1992 by S.R. 1992/94, art. 2); Social Security (Consequential Provisions) Act 1992 (c. 6), s. 4, Sch. 2 para. 52(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), s. 4, Sch. 2 para. 20(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Finance (No. 2) Act 1992 (c. 48), ss. 35(2), 47, 48, 56, 77, Sch. 9 para. 20(1)(inserting ss. 143A and 143B), Sch. 17 paras. 3, 6(2)(5), 7, (the amendments coming into force 16.7.1992 except for the amendment by s. 56, Sch. 9 para. 20(1) which comes into force on 19.2.1993 by S.I. 1993/236, art. 2); and amendments (retrospective to 1.1.1992) by ss. 35(2), 47, 48 of the same 1992 Act, and amendments (27.7.1993 with effect as mentioned in ss. 84(3), 86(4), 88(4), 105(4) of the amending Act) by 1993 c. 34, ss. 84(3), 86(4), 88(4)(a)(b), 105(3)(4)

Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 paras. 15 and 32

Where Finance Act 1988 (c. 39, SIF 63;1, 2), s. 96(2) and Sch. 8 para. 7 apply (rebasing to 1982), words “6th April 1965” replaced by “31st March 1982”

Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 paras. 15 and 32

http://www.legislation.gov.uk/ukpga/1979/14/part/IV/crossheading/close-companies/1992-03-06Capital Gains Tax Act 1979 (repealed 6.3.1992)An Act to consolidate Part III of the Finance Act 1965 with related provisions in that Act and subsequent Acts.1990-03-01texttext/xmlenStatute Law Database2011-05-271992-03-06Part IV Shares and Securities Close companies
74 Disposal of shares: relief in respect of income tax consequent on shortfall in distributions.1

If in pursuance of section 426 of the Taxes Act 1988 (consequences for income tax of apportionment of income etc. of close company) a person is assessed to income tax, then, in the computation under Chapter II of Part II of this Act of the gain accruing on a disposal by him of any shares forming part of his interest in the company to which the relevant apportionment relates, the amount of the income tax paid by him, so far as attributable to those shares, shall be allowable as a deduction.

2

Subsection (1) above shall not apply in relation to tax charged in respect of undistributed income which has, before the disposal, been subsequently distributed and is then exempt from tax by virtue of section 427(4) of the Taxes Act 1988 or in relation to tax treated as having been paid by virtue of section 426(2)(b) of that Act.

3

For the purposes of this section the income assessed to tax shall be the highest part of the individual’s income for the year of assessment in question, but so that if the highest part of the said income is taken into account under this section in relation to an assessment to tax the next highest part shall be taken into account in relation to any other relevant assessment, and so on.

4

For the purpose of identifying shares forming part of an interest in a company with shares subsequently disposed of which are of the same class, shares bought at an earlier time shall be deemed to have been disposed of before shares bought at a later time.

5

The provisions of this section shall be construed as if this section were included in sections 426 to 428 of the Taxes Act 1988.

75 Shares in close company transferring assets at an undervalue.1

If after 6th April 1965 a company which is a close company transfers an asset to any person otherwise than by way of a bargain made at arm’s length and for a consideration of an amount or value less than the market value of the asset an amount equal to the difference shall be apportioned among the issued shares of the company, and the holders of those shares shall be treated in accordance with the following provisions of this section.

2

For the purposes of the computation under Chapter II of Part II of this Act of a gain accruing on the disposal of any of those shares by the person owning them on the date of transfer an amount equal to the amount so apportioned to that share shall be excluded from the expenditure allowable as a deduction under section 32(1)(a) above from the consideration for the disposal.

3

If the person owning any of the said shares at the date of transfer is itself a close company an amount equal to the amount apportioned to the shares so owned under subsection (1) above to that close company shall be apportioned among the issued shares of that close company, and the holders of those shares shall be treated in accordance with subsection (2) above, and so on through any number of close companies.

4

This section shall not apply where the transfer of the asset is a disposal to which section 273(1) of the Taxes Act 1970 (transfers within a group of companies) applies.

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<p>
Act repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12">Taxation of Chargeable Gains Act 1992 (c. 12)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/section/289">ss. 289</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/section/290">290</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/schedule/12">Sch.12</ref>
(with
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/section/201/3">s. 201(3)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/schedule/11/paragraph/20">Sch. 11 paras. 20</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/schedule/11/paragraph/22">22</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/schedule/11/paragraph/26/2">26(2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/schedule/11/paragraph/27">27</ref>
and with saving in
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/12/schedule/11/paragraph/24/2">Sch. 11 para. 24(2)</ref>
) and subject to an amendment (
<em>prosp.</em>
) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/44">Museum and Galleries Act 1992 (c. 44)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/44/section/11/2">s. 11(2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/44/schedule/8/part/I/paragraph/1/1/2/7">Sch. 8 Pt. I para. 1(1)(2)(7)</ref>
, and amendments by:
<ref href="http://www.legislation.gov.uk/id/ukpga/1991/21">Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1991/21/section/4/2">s. 4(2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1991/21/schedule/2/paragraph/9/1/2">Sch. 2 para. 9(1)(2)</ref>
(in force 6.4.1992 by
<ref href="http://www.legislation.gov.uk/id/uksi/1991/2617">S.I. 1991/2617</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1991/2617/article/2/f">art. 2(f)</ref>
);
<ref href="http://www.legislation.gov.uk/id/uksi/1991/2874">S.I. 1991/2874</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1991/2874/article/2">art. 2</ref>
(in force 6.4.1992 by
<ref href="http://www.legislation.gov.uk/id/nisr/1992/94">S.R. 1992/94</ref>
,
<ref href="http://www.legislation.gov.uk/id/nisr/1992/94/article/2">art. 2</ref>
);
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/6">Social Security (Consequential Provisions) Act 1992 (c. 6)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/6/section/4">s. 4</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/6/schedule/2/paragraph/52/a/b">Sch. 2 para. 52(a)(b)</ref>
(in force 1.7.1992 by
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/9/section/7/2">s. 7(2)</ref>
of the amending Act);
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/9">Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/9/section/4">s. 4</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/9/schedule/2/paragraph/20/a/b">Sch. 2 para. 20(a)(b)</ref>
(in force 1.7.1992 by
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/section/7/2">s. 7(2)</ref>
of the amending Act);
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48">Finance (No. 2) Act 1992 (c. 48)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/section/35/2">ss. 35(2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/section/47">47</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/section/48">48</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/section/56">56</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/section/77">77</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1992/48/schedule/9/paragraph/20/1">Sch. 9 para. 20(1)</ref>
(inserting ss. 143A and 143B), Sch. 17 paras. 3, 6(2)(5), 7, (the amendments coming into force 16.7.1992 except for the amendment by s. 56, Sch. 9 para. 20(1) which comes into force on 19.2.1993 by
<ref href="http://www.legislation.gov.uk/id/uksi/1993/236">S.I. 1993/236</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1993/236/article/2">art. 2</ref>
); and amendments (retrospective to 1.1.1992) by ss. 35(2), 47, 48 of the same 1992 Act, and amendments (27.7.1993 with effect as mentioned in ss. 84(3), 86(4), 88(4), 105(4) of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/84/3">ss. 84(3)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/86/4">86(4)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/88/4/a/b">88(4)(a)(b)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/105/3/4">105(3)(4)</ref>
</p>
</note>
<note class="commentary F" eId="c1110701">
<p>
Words substituted by
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/1">Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/1/schedule/29/paragraph/32">Sch. 29 para. 32</ref>
</p>
</note>
<note class="commentary F" eId="c1110704">
<p>
Words substituted by
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/1">Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/1/schedule/29/paragraph/15">Sch. 29 paras. 15</ref>
and 32
</p>
</note>
<note class="commentary C" eId="c1110705">
<p>
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/39">Where Finance Act 1988 (c. 39, SIF 63;1, 2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/39/section/96/2">s. 96(2)</ref>
and Sch. 8 para. 7 apply (rebasing to 1982), words “6th April 1965” replaced by “31st March 1982”
</p>
</note>
<note class="commentary F" eId="c1110706">
<p>
Words substituted by
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/1">Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1988/1/schedule/29/paragraph/15">Sch. 29 paras. 15</ref>
and 32
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<heading> Disposal of shares: relief in respect of income tax consequent on shortfall in distributions.</heading>
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If in pursuance of
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(consequences for income tax of apportionment of income
<abbr title="et cetera" xml:lang="la">etc.</abbr>
of close company) a person is assessed to income tax, then, in the computation under Chapter
<abbr class="Acronym" title="2">II</abbr>
of Part II of this Act of the gain accruing on a disposal by him of any shares forming part of his interest in the company to which the relevant apportionment relates, the amount of the income tax paid by him, so far as attributable to those shares, shall be allowable as a deduction.
</p>
</content>
</subsection>
<subsection eId="section-74-2">
<num>2</num>
<content>
<p>
Subsection (1) above shall not apply in relation to tax charged in respect of undistributed income which has, before the disposal, been subsequently distributed and is then exempt from tax by virtue of
<ins class="d30p6163 first last">
<noteRef href="#c1110701" marker="F2" class="commentary attribute F"/>
section 427(4) of the Taxes Act 1988
</ins>
or in relation to tax treated as having been paid by virtue of
<ins class="d30p6167 first last">
<noteRef href="#c1110701" marker="F2" class="commentary attribute F"/>
section 426(2)(b) of that Act
</ins>
.
</p>
</content>
</subsection>
<subsection eId="section-74-3">
<num>3</num>
<content>
<p>For the purposes of this section the income assessed to tax shall be the highest part of the individual’s income for the year of assessment in question, but so that if the highest part of the said income is taken into account under this section in relation to an assessment to tax the next highest part shall be taken into account in relation to any other relevant assessment, and so on.</p>
</content>
</subsection>
<subsection eId="section-74-4">
<num>4</num>
<content>
<p>For the purpose of identifying shares forming part of an interest in a company with shares subsequently disposed of which are of the same class, shares bought at an earlier time shall be deemed to have been disposed of before shares bought at a later time.</p>
</content>
</subsection>
<subsection eId="section-74-5">
<num>5</num>
<content>
<p>
The provisions of this section shall be construed as if this section
<ins class="d30p6189 first last">
<noteRef href="#c1110704" marker="F3" class="commentary attribute F"/>
were included in sections 426 to 428 of the Taxes Act 1988
</ins>
.
</p>
</content>
</subsection>
</section>
<section eId="section-75" period="#period1">
<num>75</num>
<heading> Shares in close company transferring assets at an undervalue.</heading>
<subsection eId="section-75-1">
<num>
<noteRef href="#c1110705" marker="C1" class="commentary C"/>
1
</num>
<content>
<p>If after 6th April 1965 a company which is a close company transfers an asset to any person otherwise than by way of a bargain made at arm’s length and for a consideration of an amount or value less than the market value of the asset an amount equal to the difference shall be apportioned among the issued shares of the company, and the holders of those shares shall be treated in accordance with the following provisions of this section.</p>
</content>
</subsection>
<subsection eId="section-75-2">
<num>2</num>
<content>
<p>
For the purposes of the computation under Chapter
<abbr class="Acronym" title="2">II</abbr>
of Part II of this Act of a gain accruing on the disposal of any of those shares by the person owning them on the date of transfer an amount equal to the amount so apportioned to that share shall be excluded from the expenditure allowable as a deduction under section 32(1)(a) above from the consideration for the disposal.
</p>
</content>
</subsection>
<subsection eId="section-75-3">
<num>3</num>
<content>
<p>If the person owning any of the said shares at the date of transfer is itself a close company an amount equal to the amount apportioned to the shares so owned under subsection (1) above to that close company shall be apportioned among the issued shares of that close company, and the holders of those shares shall be treated in accordance with subsection (2) above, and so on through any number of close companies.</p>
</content>
</subsection>
<subsection eId="section-75-4">
<num>4</num>
<content>
<p>
This section shall not apply where the transfer of the asset is a disposal to which section 273(1) of
<ins class="d30p6227 first last">
<noteRef href="#c1110706" marker="F4" class="commentary attribute F"/>
the Taxes Act 1970
</ins>
(transfers within a group of companies) applies.
</p>
</content>
</subsection>
</section>
</hcontainer>
</part>
</portionBody>
</portion>
</akomaNtoso>