Part IIIU.K. Income Tax, Corporation Tax and Capital Gains Tax

Chapter IIIU.K. Capital Gains

Modifications etc. (not altering text)

88 Identification of securities etc. disposed of: general rules. U.K.

(1)With respect to [F1relevant securities] held on, or acquired on or after, 6th April 1982 or, in the case of a company, 1st April 1982 the provisions of this section (other than subsection (8)) [F2and section 89 below] have effect in place of sections 65 and 66 of the Capital Gains Tax Act 1979 (pooling and other rules for identification of securities) ; and, in taking account of those provisions,—

(a)this section, [F2section 89 below] and Part II of Schedule 13 shall have effect subject to section 58 of the M1 Finance (No. 2) Act 1975 (disposal of shares and securities within prescribed period of acquisition); [F3and]

[F3(b)the reference in section 68(4) of the Capital Gains Tax Act 1979 (general identification rules for gilt-edged securities) to section 66(1) of that Act shall be construed as including a reference to subsection (4) below].

(2)Where a person disposes of [F1relevant securities], the securities disposed of shall be identified in accordance with the rules contained in this section with the securities of the same class acquired by him which could be comprised in that disposal, and shall be so identified notwithstanding that they are otherwise identified by the disposal or by a transfer or delivery giving effect to it (but so that where a person disposes of securities in one capacity, they shall not be identified with securities which he holds or can, dispose of only in some other capacity).

(3)[F1Relevant 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.

(4)[F1Relevant securities] disposed of for transfer or delivery on a particular date or in a particular period—

(a)shall not be identified with securities acquired for transfer or delivery on a later date or in a later period and

(b)shall be identified with securities acquired for transfer or delivery on or before that date or in or before that period, but on or after the date of the disposal, rather than with securities not so acquired.

(5)The [F1relevant securities] disposed of shall be identified—

(a)with securities acquired within the twelve months preceding the disposal rather than with securities not so acquired, and with securities so acquired on an earlier date rather than with securities so acquired on a later date, and

(b)subject to paragraph (a) above, with securities acquired on a later date rather than with securities acquired on an earlier date ; and

(c)with securities acquired at different times on any one day in as nearly as may be equal proportions.

[F4(5A)If an election has been made under Schedule 6 to the Finance Act 1983, securities disposed of shall be identified with securities comprised in a holding, within the meaning of paragraph 3 of that Schedule, rather than with securities of a description specified in paragraph 1(2)(b) thereof.]

(6)The rules contained in the preceding subsections shall have priority according to the order in which they are so contained.

(7)Notwithstanding anything in subsections (3) to (5) above, where, under arrangements designed to postpone the transfer or delivery of [F1relevant securities] disposed of, a person by a single bargain acquires securities for transfer or delivery on a particular date or in a particular period and disposes of them for transfer or delivery on a later date or in a later period, then—

(a)the securities disposed of by that bargain shall be identified with the securities thereby acquired ; and

(b)securities previously disposed of which, but for the operation of paragraph (a) above in relation to acquisitions for transfer or delivery on the earlier date or in the earlier period, would have been identified with the securities acquired by that bargain—

(i)shall, subject to subsection (3) above, be identified with any available securities acquired for such transfer or delivery (that is to say, any securities so acquired other than securities to which paragraph (a) above applies and other than securities with which securities disposed of for such transfer or delivery would be identified apart from this subsection) ; and

(ii)in so far as they cannot be so identified shall be treated as disposed of for transfer or delivery on the later date, or in the later period, mentioned above.

(8)The provisions of Part 11 of Schedule 13 to this Act have effect with respect to [F1relevant securities] acquired before 6th April 1982 or, in the case of a company, before 1st April 1982.

(9)In this section and Schedule 13 to this Act [F5“relevant securities” means—

(a)securities, within the meaning of [F6section 710 of the Taxes Act 1988];

(b)deep discount secuities, within the meaining of [F6Schedule 4 to that Act]; and

(c)securities which are, or have at any time been, material interests in a non-qualifying offshore fund, within the meaning of Chapter [F6V of Part XVII of the Taxes Act 1988]]

and shares or securities of a company shall not be treated for the purposes of this section and that Schedule as being of the same class unless they are so treated by the practice of The Stock Exchange or would be so treated if dealt with on The Stock Exchange.

Textual Amendments

F1Words substituted by Finance Act 1985 (c. 54), s. 68 and Sch. 19 Pt. I for disposals made on or after 6 April 1985, or 1 April 1985 for companies, or 28 February 1986 for securities within the meaning of Finance Act 1985 (c. 54) Part II Ch. IV other than gilt-edged securities (Capital Gains Tax Act 1979 (c. 14, SIF 63:2) Sch. 2) and qualifying corporate bonds (Finance Act 1984 (c. 43, SIF 40:1) s. 64), which are not affected

F2Words repealed by Finance Act 1985 (c. 54), ss. 68, 98(6), Schs. 19 Pt. I and 27 Pt. VII for disposals made on or after 6 April 1985 or 1 April 1985 for companies, 2 July 1986 for gilt-edged securities (Capital Gains Tax Act 1979 (c. 14, SIF 63:2) Sch. 2) and qualifying corporate bonds (Finance Act 1984 (c. 43, SIF 40:1) s. 64), or 28 February 1986 for other securities within the meaning of Finance Act 1985 (c. 54) Part II Ch. IV

F3S. 88(1)(b) and the word preceding it repealed by Finance Act 1985 (c. 54), s. 98(6) and Sch. 27 Pt. VII for disposals made on or after 6 April 1985 or 1 April 1985 for companies, 2 July 1986 for gilt-edged securities (Capital Gains Tax Act 1979 (c. 14, SIF 63:2) Sch. 2) and qualifying corporate bonds (Finance Act 1984 (c. 43, SIF 40:1) s. 64), or 28 February 1986 for other securities within the meaning of Finance Act 1985 (c. 54) Part II Ch. IV

F4S. 88(5A) inserted by Finance Act 1983 (c. 28), s. 34(2) and repealed by Finance Act 1985 (c. 54), ss. 68, 98(6), Schs. 19 Pt. I and 27 Pt. VII for disposals made on or after 6 April 1985 or 1 April 1985 for companies, 2 July 1986 for gilt-edged securities (Capital Gains Tax Act 1979 (c. 14, SIF 63:2) Sch. 2) and qualifying corporate bonds (Finance Act 1984 (c. 43, SIF 40:1) s. 64), or 28 February 1986 for other securities within the meaning of Finance Act 1985 (c. 54) Part II Ch. IV

F5S. 88(9)(a)–(c) and the preceding words substituted for s. 88(9)(a)(b) and the preceding words by Finance Act 1985 (c. 54), s. 68 and Sch. 19 Pt. I for disposals made on or after 6 April 1985, or 1 April 1985 for companies, or 28 February 1986 for securities within the meaning of Finance Act 1985 (c. 54) Part II Ch. IV other than gilt-edged securities (Capital Gains Tax Act 1979 (c. 14, SIF 63:2) Sch. 2) and qualifying corporate bonds (Finance Act 1984 (c. 43, SIF 40:1) s. 64), which are not affected

Modifications etc. (not altering text)

Marginal Citations