Taxation of Chargeable Gains Act 1992

[F1 10 (1) Where, in the case of any asset disposed of (“the relevant asset"), the period after 5th April 1998 for which that asset had been held at the time of its disposal is or includes a period during which— U.K.

(a) the person making the disposal, or

(b) a relevant predecessor of his,

had limited exposure to fluctuations in the value of the asset, the period during which that person or predecessor had that limited exposure shall not count for the purposes of taper relief.

(2) The times when a person shall be taken for the purposes of this paragraph to have had such limited exposure in the case of the relevant asset shall be all the times while he held that asset when a transaction entered into at any time by him, or by a relevant predecessor of his, had the effect that he—

(a) was not exposed, or not exposed to any substantial extent, to the risk of loss from fluctuations in the value of the relevant asset; and

(b) was not able to enjoy, or to enjoy to any substantial extent, any opportunities to benefit from such fluctuations.

(3) The transactions referred to in sub-paragraph (2) above do not include—

(a) any insurance policy which the person in question might reasonably have been expected to enter into and which is insurance against the loss of the relevant asset or against damage to it, or against both; or

(b) any transaction having effect in relation to fluctuations in the value of the relevant asset so far only as they are fluctuations resulting from fluctuations in the value of foreign currencies.

(4) In this paragraph “relevant predecessor”—

(a) in relation to a person disposing of an asset, means any person other than the person disposing of it who held that asset at a time falling in the period which is taken to be the whole period for which it had been held at the time of its disposal; and

(b) in relation to a relevant predecessor of a person disposing of an asset, means any other relevant predecessor of that person.

(5) In sub-paragraph (4) above, the reference, in relation to an asset, to the whole period for which it had been held at the time of its disposal is a reference to the period that would be given for that asset by paragraph 2(1) above if, in paragraph (a), the words “whichever is the later of 6th April 1998 and" were omitted.]

Textual Amendments

F1 Sch. A1 inserted (with effect in accordance with s. 121(4) of the amending Act) by Finance Act 1998 (c. 36), s. 121(2), Sch. 20