Finance (No.2) Act 1987

Chargeable gains comprised in profits.

2 (1) It shall be assumed for the purposes of this paragraph that the straddling period of the company consists of two separate accounting periods—

(a) the first beginning at the beginning of the straddling period and ending immediately before the 1987 date; and

(b) the second beginning on the 1987 date and ending at the end of the straddling period.

(2) In this Part of this Schedule those two notional accounting periods are referred to as “component periods”.

(3) A separate computation shall be made under section 265 of the Taxes Act (computation of company’s chargeable gains) for each of the component periods and, by virtue of subsection (3) of the principal section, only the amount (if any) computed for the first component period shall be reduced under section 93.

(4) If, in accordance with sub-paragraph (3) above,—

(a) a positive amount is computed for the first component period, and

(b) the amount computed for the second component period is nil,

any excess for the second component period of allowable losses over chargeable gains shall be treated for the purposes of this paragraph as an allowable loss of the first component period and the amount originally computed for that period shall be recalculated accordingly.

(5) The amount which is to be included in respect of chargeable gains in the company’s total profits for the straddling period—

(a) shall be the sum of the amounts computed as mentioned above for the two component periods; and

(b) shall not itself be subject to any reduction under section 93.

(6) The preceding provisions of this paragraph have effect in place of any provision of section 93 under which the amount to be included in respect of chargeable gains in the company’s total profits for the straddling period would fall to be apportioned between different parts of that period.