Finance Act 1989

Charge to tax on transfer U.K.

Textual Amendments

F1 Sch. 11 repealed (29.4.1996) by 1996 c. 8, ss. 104, 205, Sch. 14 para. 57, Sch. 41 Pt. V(3) (with savings in Pt. IV Ch. II (ss. 80-105))

5 (1) This paragraph applies if—

(a) there is a transfer of a deep gain security on or after 14th March 1989(irrespective of when the person making the transfer acquired it), and

(b) the amount obtained on transfer exceeds the amount paid on acquisition.

(2) In such a case—

(a) an amount equal to the difference between those two amounts, less theamount of any costs, shall be treated as income of the person making thetransfer,

(b) the income shall be chargeable to tax under Case III or Case IV (as thecase may be) of Schedule D,

(c) the income shall be treated as arising in the year of assessment in whichthe transfer takes place, and

(d) notwithstanding anything in sections 64 to 67 of the Taxes Act 1988, thetax shall be computed on the income arising in the year of assessment forwhich the computation is made.

(3) For the purposes of this paragraph—

(a) the amount obtained on transfer is the amount obtained, in respect of thetransfer, by the person making it,

(b) the amount paid on acquisition is the amount paid by that person inrespect of his acquisition of the security (or his last acquisition of itbefore the transfer), and

(c) costs are the costs incurred by that person in connection with thetransfer and with his acquisition of the security (or his last acquisition ofit before the transfer).

(4) For the purposes of sub-paragraph (3)(a) above the person making thetransfer shall be treated as obtaining in respect of it—

(a) any amount he actually obtains in respect of it, and

(b) any amount he is entitled to obtain, but does not obtain, in respect ofit.

(5) Sub-paragraph (4) above shall not apply where paragraph 7, 8 or 9 belowapplies.