Finance Act 1988

Section 97.

SCHEDULE 9U.K. Deferred Charges on Gains Before 31st March 1982

Modifications etc. (not altering text)

C1Sch. 9 excluded (E.W.S) (16.1.1992) by S.I. 1992/58, art. 9, Sch. 2 para.13

Reduction of deduction or gainU.K.

1Where this Schedule applies—

(a)in a case within paragraph 2 below, the amount of the deduction referred to in that paragraph, and

(b)in a case within paragraph [F12A or] 3 below, the amount of the gain referred to in that paragraph,

shall be one half of what it would be apart from this Schedule.

Textual Amendments

Charges rolled-over or held-overU.K.

2(1)Subject to [F2sub-paragraphs (2) to (2B)] below, this Schedule applies on a disposal, not being a no gain/no loss disposal, of an asset on or after 6th April 1988 if—

(a)the person making the disposal acquired the asset after 31st March 1982,

(b)a deduction falls to be made by virtue of any of the enactments specified in sub-paragraph (3) below from the expenditure which is allowable in computing the amount of any gain accruing on the disposal, and

(c)the deduction is attributable (whether directly or indirectly and whether in whole or in part) to a chargeable gain accruing on the disposal before 6th April 1988 of an asset acquired before 31st March 1982 by the person making that disposal.

(2)This Schedule does not apply where, by reason of the previous operation of this Schedule, the amount of the deduction is less than it otherwise would be.

[F3(2A)Where the disposal takes place on or after 19th March 1991, this Schedule does not apply if the amount of the deduction would have been less had relief by virtue of a previous application of this Schedule been duly claimed.

(2B)Where—

(a)the asset was acquired on or after 19th March 1991,

(b)the deduction is partly attributable to a claim by virtue of section 117(3) of the Capital Gains Tax Act 1979 (roll-over into non-depreciating asset instead of into depreciating asset), and

(c)the claim applies to the asset,

this Schedule does not apply by virtue of this paragraph.]

(3)The enactments referred to in sub-paragraph (1) above are—

(a)section 21(4) and (50 of the M1Capital Gains Tax Act 1979 (roll-over where replacement asset acquired after receipt of compensation or insurance money);

(b)section 111A of that Act (roll-over where replacement land acquired on compulsory acquisition of other land);

(c)section 115 of that Act (roll-over where replacement asset acquired on disposal of business asset);

(d)section 123 of that Act (roll-over where shares acquired on disposal of business to company);

(e)section 126 of that Act (hold-over where business asset acquired by gift); and

(f)section 79 of the M2Finance Act 1980 (hold-over where asset acquired by gift).

Textual Amendments

Marginal Citations

[F42A(1)This paragraph applies where this Schedule would have applied on a disposal but for paragraph 2(2B) above.

(2)This Schedule applies on the disposal if paragraph 3 below would have applied had—

(a)section 117(2) of the Capital Gains Tax Act 1979 (postponement of charge where depreciating asset acquired as replacement for business asset) continued to apply to the gain carried forward as a result of the claim by virtue of section 117(3) of that Act, and

(b)the time of the disposal been the time when that gain was treated as accruing by virtue of section 117(2) of that Act.]

Textual Amendments

Postponed chargesU.K.

3(1)Subject to [F5sub-paragraphs (3) and (4)] below [F6and to paragraph 1 of Schedule 15 to the Finance Act 1989], this Schedule applies where—

(a)by virtue of any of the enactments specified in sub-paragraph (2) below a gain is treated as accruing in consequence of an event occurring on or after 6th April 1988, and

(b)the gain is attributable (whether directly or indirectly and whether in whole or in part) to the disposal before 6th April 1988 of an asset acquired before 31st March 1982 by the person making that disposal.

(2)The enactments referred to in sub-paragraph (1) above are—

(a)section 268A of the Taxes Act 1970 (postponement of charge where securities acquired in exchange for business acquired by non-resident company);

(b)section 278(3) of that Act (charge on company leaving group in respect of asset acquired from another member of same group);

(c)section 84 of the M3Capital Gains Tax Act 1979 (postponement of charge where gilts acquired on compulsory acquisition of shares);

(d)section 111B(3) of that Act (postponement of charge where depreciating asset acquired on compulsory acquisition of land);

(e)section 117(2) of that Act F7. . .;

(f)section 79 of the M4Finance Act 1981 (activation of charge rolled-over under section 79 of the Finance Act 1980 on emigration of donee); and

(g)paragraph 10 of Schedule 13 to the M5Finance Act 1984 (postponement of charge on reorganisation etc. involving acquisition of qualifying corporate bonds).

(3)Where a gain is treated as accruing by virtue of section 278(3) of the Taxes Act 1970 this Schedule applies only if the asset was acquired by the chargeable company (within the meaning of section 278) before 6th April 1988.

[F8(4)Where a gain is treated as accruing in consequence of an event occurring on or after 19th March 1991, this Schedule does not apply if—

(a)the gain is attributable (whether directly or indirectly and whether in whole or part) to the disposal of an asset on or after 6th April 1988, or

(b)the amount of the gain would have been less had relief by virtue of a previous application of this Schedule been duly claimed.]

Textual Amendments

Marginal Citations

Previous no gain/no loss disposalsU.K.

4Where—

(a)a person makes a disposal of an asset which he acquired on or after 31st March 1982, and

(b)the disposal by which he acquired the asset and any previous disposal of the asset on or after 31st March 1982 was a no gain/no loss disposal,

he shall be treated for the purposes of paragraphs 2(1)(c) and 3(1)(b) above as having acquired the asset before 31st March 1982.

5(1)Sub-paragraph (2) below applies where—

(a)on or after 6th April 1988 a person makes a disposal of an asset which he acquired on or after 31st March 1982,

(b)the disposal by which he acquired the asset was a no gain/no loss disposal, and

(c)a deduction falling to be made as mentioned in paragraph (b) of sub-paragraph (1) of paragraph 2 above which was attributable as mentioned in paragraph (c) of that sub-paragraph was made—

(i)on that disposal, or

(ii)where one or more earlier no gain/no loss disposals of the asset have been made on or after 31st March 1982 and since the last disposal of the asset which was not a no gain/no loss disposal, on any such earlier disposal.

(2)Where this sub-paragraph applies the deduction shall be treated for the purposes of paragraph 2 above as falling to be made on the disposal mentioned in sub-paragraph (1)(a) above and not on the no gain/no loss disposal.

6For the purposes of this Schedule “no gain/no loss disposal” has the same meaning as in paragraph 1 of Schedule 8 to this Act.

Assets derived from other assetsU.K.

7The references in paragraphs 2(1)(c) and 3(1)(b) above to the disposal of an asset acquired by a person before 31st March 1982 include references to the disposal of an asset which was not acquired by the person before that date if its value is derived from another asset which was so acquired and of which account is to be taken in relation to the disposal under section 36 of the M6Capital Gains Tax Act 1979.

Marginal Citations

ClaimsU.K.

8(1)No relief shall be given under this Schedule unless a claim is made—

(a)in the case of a gain treated as accruing by virtue of section 278(3) of the Taxes Act 1970 to a company which ceases to be a member of a group, within the period of two years beginning at the end of the accounting period [F9in which] the company ceases to be a member of the group,

(b)in any other case, within the period of two years beginning at the end of the year of assessment or accounting period in which the disposal in question is made, or the gain in question is treated as accruing,

or within such longer period as the Board may by notice in writing allow.

(2)A claim under sub-paragraph (1) above shall be supported by such particulars as the inspector may require for the purpose of establishing entitlement to relief under this Schedule and the amount of relief due.

Textual Amendments

F9Words in Sch. 9 para. 8(1)(a) substituted (25.7.1991)(in relation to claims made on or after 19. 03. 1991) by Finance Act 1991 (c. 31, SIF 63:2), s. 101(9)(10)