Finance Act 1982

9 (1) For the purposes of this paragraph there shall be ascertained—

(a) the amount which would be the relevant allowable expenditure on a disposal of the whole of the holding on the day in 1982 which immediately precedes the operative date; and

(b) the amount which would have been the relevant allowable expenditure on a disposal of the whole of the holding (as then constituted) on the same day in 1981;

and in this paragraph these amounts are referred to as the 1982 amount and the 1981 amount respectively.

(2) If the 1982 amount exceeds the 1981 amount, paragraph 8(2) above shall not apply to the holding and the following provisions of this paragraph shall have effect in relation to it.

(3) Where sub-paragraph (2) above applies, the identification rules set out in sub-paragraph (4) below shall be assumed to have applied in relation to every acquisition or disposal of securities which occurred after the day referred to in sub-paragraph (1)(b) above and before the operative date and which, apart from this paragraph, would have increased or reduced the size of the holding; and accordingly—

(a) only such of the securities (if any) which constituted the holding on that day as are not identified, by virtue of those rules, with securities disposed of before the operative date shall be regarded as constituting the holding on the operative date; and

(b) all securities acquired after that day and before the operative date, so far as they are not so identified with securities disposed of before the operative date, shall be regarded as separate assets.

(4) The identification rules referred to in sub-paragraph (3) above are—

(a) that securities disposed of on an earlier date shall be identified before securities disposed of on a later date, and the identification of the securities first disposed of shall accordingly determine the securities which could be comprised in the later disposal; and

(b) that securities disposed of shall be identified with securities acquired on a later date rather than with securities acquired on an earlier date; and

(c) that securities disposed of shall be identified with securities acquired at different times on any one day in as nearly as may be equal proportions;

and these rules shall have priority according to the order in which they are set out above.

(5) In this paragraph and paragraph 10 below—

(a) “the reduced holding” means the securities referred to in sub-paragraph (3)(a) above; and

(b) “relevant allowable expenditure” has, in relation to a disposal taking place at any time, the meaning assigned to it by subsection (2)(b) of section 86 of this Act in relation to a disposal to which that section applies.

(6) Sub-paragraph (2) of paragraph 8 above shall apply in relation to the reduced holding but, so far as paragraph (c) of that sub-paragraph is concerned, subject to paragraph 10(1) below.