SCHEDULE 7 Relief for gifts of business assets
Part II Reductions in held-over gain
Reductions peculiar to disposals of assets
5
(1)
If, in the case of a disposal of an asset, the asset was not used for the purposes of the trade, profession or vocation referred to in paragraph (a) of the principal provision throughout the period of its ownership by the transferor, the amount of the held-over gain shall be reduced by multiplying it by the fraction—
where—
A is the number of days in that period of ownership during which the asset was so used, and
B is the number of days in that period.
(2)
This paragraph shall not apply where the circumstances are such that a reduction in respect of the asset—
(a)
is made under Chapter II of Part V of the M1Inheritance Tax Act 1984 in relation to a chargeable transfer taking place on the occasion of the disposal, or
(b)
would be so made if there were a chargeable transfer on that occasion, or
(c)
would be so made but for section 124A of that Act (assuming, where there is no chargeable transfer on that occasion, that there were).
6
(1)
If, in the case of a disposal of an asset, the asset is a building or structure and, over the period of its ownership by the transferor or any substantial part of that period, part of the building or structure was, and part was not, used for the purposes of the trade, profession or vocation referred to in paragraph (a) of the principal provision, there shall be determined the fraction of the unrelieved gain on the disposal which it is just and reasonable to apportion to the part of the asset which was so used, and the amount of the held-over gain (as reduced, if appropriate, under paragraph 5 above) shall be reduced by multiplying it by that fraction.
(2)
This paragraph shall not apply where the circumstances are such that a reduction in respect of the asset—
(a)
is made under Chapter II of Part V of the Inheritance Tax Act 1984 in relation to a chargeable transfer taking place on the occasion of the disposal, or
(b)
would be so made if there were a chargeable transfer on that occasion, or
(c)
would be so made but for section 124A of that Act (assuming, where there is no chargeable transfer on that occasion, that there were).