Search Legislation

Income and Corporation Taxes Act 1988

 Help about what version

What Version

 Help about advanced features

Advanced Features

 Help about opening options

Opening OptionsExpand opening options

Changes over time for: Paragraph 2

 Help about opening options

Version Superseded: 01/12/2009

Alternative versions:

Status:

Point in time view as at 01/02/1991. This version of this provision has been superseded. Help about Status

Changes to legislation:

Income and Corporation Taxes Act 1988, Paragraph 2 is up to date with all changes known to be in force on or before 29 November 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. Help about Changes to Legislation

2(1)In the case of an offshore fund which throughout any account period operates equalisation arrangements, on any occasion in that period when there is a disposal to which this sub-paragraph applies, the fund shall be treated for the purposes of this Part of this Schedule as making a distribution of an amount equal to so much of the consideration for the disposal as, in accordance with this paragraph, represents income accrued to the date of the disposal.

(2)Sub-paragraph (1) above applies to a disposal—

(a)which is a disposal of a material interest in the offshore fund concerned; and

(b)which is a disposal to which this Chapter applies (whether by virtue of section 758(3) or otherwise) or is one to which this Chapter would apply if subsections (5) and (6) of that section applied generally and not only for the purpose of determining whether, by virtue of subsection (3) of that section, there is a disposal to which this Chapter applies; and

(c)which is not a disposal with respect to which the conditions in subsection (4) of that section are fulfilled; and

(d)which is a disposal to the fund itself or to the persons concerned in the management of the fund (“the managers”) in their capacity as such.

(3)On a disposal to which sub-paragraph (1) above applies, the part of the consideration which represents income accrued to the date of the disposal is, subject to sub-paragraph (4) and paragraph 4(4) below, the amount which would be credited to the equalisation account of the offshore fund concerned in respect of accrued income if, on the date of the disposal, the material interest which is disposed of were acquired by another person by way of initial purchase.

(4)If, after the beginning of the period by reference to which the accrued income referred to in sub-paragraph (3) above is calculated, the material interest disposed of by a disposal to which sub-paragraph (1) above applies was acquired by way of initial purchase (whether or not by the person making the disposal)—

(a)there shall be deducted from the amount which, in accordance with sub-paragraph (3) above, would represent income accrued to the date of the disposal, the amount which on that acquisition was credited to the equalisation account of the fund in respect of accrued income; and

(b)if in that period there has been more than one such acquisition of that material interest by way of initial purchase, the deduction to be made under this sub-paragraph shall be the amount so credited to the equalisation account on the latest such acquisition prior to the disposal in question.

(5)Where, by virtue of this paragraph, an offshore fund is treated for the purposes of this Part of this Schedule as making a distribution on the occasion of a disposal, the distribution shall be treated for those purposes—

(a)as complying with paragraph 1(1)(d) above; and

(b)as made out of the income of the fund for the account period in which the disposal occurs; and

(c)as paid, immediately before the disposal, to the person who was then the holder of the interest disposed of.

(6)In any case where—

(a)a distribution in respect of an interest in an offshore fund is made to the managers of the fund, and

(b)their holding of that interest is in their capacity as such, and

(c)at the time of the distribution, the fund is operating equalisation arrangements,

the distribution shall not be taken into account for the purposes of paragraph 1(1) above except to the extent that the distribution is properly referable to that part of the period for which the distribution is made during which that interest has been held by the managers of the fund in their capacity as such.

(7)Subsection (2) of section 758 applies for the purposes of this paragraph as it applies for the purposes of that section.

Back to top

Options/Help

You have chosen to open The Whole Act

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?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

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?

You have chosen to open the Whole Act without Schedules

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?

You have chosen to open Schedules only

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?