- Latest available (Revised)
- Point in Time (31/07/1998)
- Original (As enacted)
Version Superseded: 01/04/2010
Point in time view as at 31/07/1998. This version of this provision has been superseded.
You are viewing this legislation item as it stood at a particular point in time. A later version of this or provision, including subsequent changes and effects, supersedes this version.
Note the term provision is used to describe a definable element in a piece of legislation that has legislative effect – such as a Part, Chapter or section.
Income and Corporation Taxes Act 1988, Paragraph 3 is up to date with all changes known to be in force on or before 16 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
3(1)This paragraph applies in any case where—
[F1(a)an accounting period of a controlled foreign company (“the apportionment period”) is one in respect of which an apportionment under section 747(3) falls to be made; and]
(b)the company’s chargeable profits for [F2the apportionment period] have been apportioned among the persons in subsection (3) of that section; and
(c)a company resident in the United Kingdom (“the claimant company”) disposes of—
(i)shares in the controlled foreign company, or
(ii)shares in another company which, in whole or in part, give rise to the claimant company’s interest in the controlled foreign company,
being, in either case, shares acquired before the end of [F2the apportionment period]; and
(d)by virtue of the apportionment referred to in paragraph (b) above, a sum is, under section 747(4)(a), [F3chargeable on] the claimant company as if it were an amount of corporation tax; and
(e)the claimant company makes a claim for relief under this paragraph;
and in this paragraph the disposal mentioned in paragraph (c) above is referred to as “the relevant disposal”.
(2)Subject to the following provisions of this paragraph, in the computation under Chapter [F4III of Part II of the 1992] Act of the gain accruing on the relevant disposal, the appropriate fraction of the sum referred to in sub-paragraph (1)(d) above shall be allowable as a deduction; but to the extent that any sum has been allowed as a deduction under this sub-paragraph it shall not again be allowed as a deduction on any claim under this paragraph (whether made by the claimant company or another company).
(3)In relation to the relevant disposal, the appropriate fraction is—
where—
A is the average market value in [F5the apportionment period] of the shares disposed of, and
B is the average market value in that period of the interest in the controlled foreign company which, in the case of the claimant company, was taken into account in the apportionment referred to in sub-paragraph (1)(b) above.
(4)Where, before the relevant disposal—
(a)a dividend is paid by the controlled foreign company, and
(b)the profits out of which the dividend is paid are those from which the chargeable profits referred to in sub-paragraph (1)(b) above are derived, and
(c)at least one of the two conditions in sub-paragraph (5) below is fulfilled,
this paragraph does not apply in relation to a sum [F6chargeable under section 747(4)(a)] in respect of so much of the chargeable profits as corresponds to the profits which the dividend represents.
(5)The conditions referred to in sub-paragraph (4) above are—
(a)that the effect of the payment of the dividend is such that the value of the shares disposed of by the relevant disposal is less after the payment than it was before it; and
(b)that, in respect of a dividend paid or payable on the shares disposed of by the relevant disposal, the claimant company is, by virtue of paragraph 4(2) below, entitled under Part XVIII to relief (by way of underlying tax) by reference to sums which include the sum referred to in sub-paragraph (1)(d) above.
(6)A claim for relief under this paragraph shall be made before the expiry of the period of three months beginning—
(a)at the end of the accounting period in which the relevant disposal occurs; or
(b)if it is later, on the date on which the assessment to tax for which the claimant company is liable by virtue of section 747(4)(a) becomes final and conclusive.
[F7(6A)Nothing in—
(a)paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or
(b)Schedule 1A to the Management Act (claims or elections not included in returns),
shall apply, whether by virtue of section 754 or otherwise, to a claim under sub-paragraph (6) above.]
(7)In identifying for the purposes of this paragraph shares in a company with shares of the same class which are disposed of by the relevant disposal, shares acquired at an earlier time shall be deemed to be disposed of before shares acquired at a later time.
Textual Amendments
F1Sch. 26 para. 3(1)(a) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 35(2); S.I. 1998/3173, art. 2
F2Words in Sch. 26 para. 3(1)(b)(c) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 35(3); S.I. 1998/3173, art. 2
F3Words in Sch. 26 para. 3(1)(d) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 35(4); S.I. 1998/3173, art. 2
F4Words in Sch. 26 para. 3 substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(62) (with ss. 60, 101(1), 171, 201(3))
F5Words in Sch. 26 para. 3(3) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 35(5); S.I. 1998/3173, art. 2
F6Words in Sch. 26 para. 3(4) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 35(6); S.I. 1998/3173, art. 2
F7Sch. 26 para. 3(6A) inserted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 35(7); S.I. 1998/3173, art. 2
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: