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- Point in Time (27/07/1993)
- Original (As enacted)
Version Superseded: 03/05/1994
Point in time view as at 27/07/1993. This version of this provision has been superseded.
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(1)Subject to the following provisions of this section, in the case of any disposal of shares in or other securities of any company in relation to which a claim is made under section 164A—
(a)the gains which (apart from sections 163 to 164B) would on the disposal accrue to the individual or, as the case may be, the trustees shall be aggregated,
(b)the amount available in respect of the disposal for relief under sections 163 and 164 and for the making of deductions under section 164A(2) above shall be deemed to be confined to the appropriate proportion of the aggregated gains, and
(c)so much of the aggregated gains as exceeds the amount so available shall be disregarded for the purposes of sections 163 to 164B and, accordingly, shall constitute chargeable gains.
(2)Subject to subsection (4) below, in this section “the appropriate proportion”, in relation to gains accruing on the disposal of shares in or other securities of a company that is not a holding company of a trading group, means the proportion which the amount specified in paragraph (a) below bears to the amount specified in paragraph (b) below, that is to say—
(a)that part of the value of the company’s chargeable assets at the relevant time which is attributable to the value of the company’s chargeable business assets; and
(b)the whole of the value of the company’s chargeable assets at that time.
(3)Subject to subsection (4) below, in this section “the appropriate proportion”, in relation to gains accruing on the disposal of shares in or other securities of a holding company of a trading group, means the proportion which the amount specified in paragraph (a) below bears to the amount specified in paragraph (b) below, that is to say—
(a)that part of the value of the trading group’s chargeable assets at the relevant time which is attributable to the value of the trading group’s chargeable business assets; and
(b)the whole of the value of the trading group’s chargeable assets at that time.
(4)Where a company or trading group has no chargeable assets, “the appropriate proportion”, in relation to the gains accruing on the disposal of shares in or other securities of that company or, as the case may be, of the holding company of that group, means the whole of those gains.
(5)Subject to subsection (6)(b) below, every asset of a company is for the purposes of this section a chargeable asset of that company except one, on the disposal of which by the company at the relevant time, no gain accruing to the company would be a chargeable gain.
(6)For the purposes of this section—
(a)any reference, in relation to a trading group, to the trading group’s chargeable assets or chargeable business assets is a reference to the chargeable assets or, as the case may be, chargeable business assets of every member of the trading group; and
(b)a holding by one member of the trading group of the ordinary share capital of another member of the group is not a chargeable asset.
(7)Where the whole of the ordinary share capital of a 51 per cent. subsidiary of a holding company is not owned directly or indirectly by that company, then, for the purposes of this section, the value of the chargeable assets and of the chargeable business assets of that subsidiary shall be taken to be reduced according to the formula—
(8)In subsection (7) above—
A is the value falling to be reduced of the chargeable assets or chargeable business assets of the subsidiary;
B is the amount of the ordinary share capital of the subsidiary owned, directly or indirectly, by the holding company;
C is the whole of the ordinary share capital of the subsidiary;
and section 838 of the Taxes Act (definition of expressions in relation to subsidiaries) shall apply for construing that subsection and this subsection.
(9)In this section “chargeable business asset”, in relation to any company, means a chargeable asset (including goodwill but not including any shares or other securities or any assets held as investments) which is, or is an interest in, an asset used for the purposes of a trade, profession, vocation, office or employment carried on by—
(a)the individual concerned,
(b)any personal company of that individual,
(c)a member of a trading group of which the holding company is a personal company of that individual, or
(d)a partnership of which that individual is a member.
(10)For the purposes of the application of this section to a case in which trustees dispose of any shares or other securities, the references in subsection (9) above to the individual concerned are references to the qualifying beneficiary.
(11)In this section “the relevant time” has the same meaning as in section 164B.
(12)This section shall be without prejudice to the provisions of paragraphs 7 to 11 of Schedule 6.]
Textual Amendments
F2Ss. 164A-164N (Pt. V, Ch. 1A) inserted (27.7.1993 with effect in relation to any disposal made on or after 16.3.1993 as mentioned in s. 87(2)) by 1993 c. 34, s. 87, Sch. 7 Pt. II para.3
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