SCHEDULES
F1SCHEDULE A1 Application of taper relief
F2Periods of share ownership not to count if company is not active
Sch. A1 para. 11A and cross-heading inserted (with effect in accordance with Sch. 10 para. 3(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 10 para. 3(1)
11A
1
Where there is a disposal of an asset consisting of shares in a company, any period after 5th April 1998 during which the asset consisted of shares in a company that—
a
was a close company, and
b
was not active,
shall not count for the purposes of taper relief.
2
Subject to the following provisions of this paragraph, a company is regarded as active at any time when—
a
it is carrying on a business of any description,
b
it is preparing to carry on a business of any description, or
c
it or another person is winding up the affairs of a business of any description that it has ceased to carry on.
3
In sub-paragraph (2) above—
a
references to a business include a business that is not conducted on a commercial basis or with a view to the realisation of a profit, and
b
references to carrying on a business include holding assets and managing them.
4
For the purposes of this paragraph a company is not regarded as active by reason only of its doing all or any of the following—
a
holding money (in any currency) in cash or on deposit;
b
holding other assets whose total value is insignificant;
c
holding shares in or debentures of a company that is not active;
d
making loans to an associated company or to a participator or an associate of a participator;
e
carrying out administrative functions in order to comply with requirements of F3the Companies Acts (as defined in section 2 of the Companies Act 2006) or other regulatory requirements.
5
Notwithstanding anything in sub-paragraphs (2) to (4) above a company shall be treated as active for the purposes of this paragraph if—
a
it is the holding company of a group of companies that contains at least one active company, or
b
it has a qualifying shareholding in a joint venture company or is the holding company of a group of companies any member of which has a qualifying shareholding in a joint venture company.
6
In this paragraph “associated company” has the meaning given by section 416 of the Taxes Act and “participator” and “associate” have the meaning given by section 417 of that Act.
7
Any reference in this paragraph to shares in or debentures of a company includes an interest in, or option in respect of, shares in or debentures of a company.
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