Taxation of Chargeable Gains Act 1992

[F1 [F2 169LA Relevant business assets: goodwill transferred to a [F3 close company] U.K.

(1) [F4 Subject to subsection (1A),] Subsection (4) applies if—

(a) as part of a qualifying business disposal, a person (“P”) disposes of goodwill directly or indirectly to a close company (“C”), [F5 and]

[F6 (aa) immediately after the disposal—

(i) P and any relevant connected person together own 5% or more of the ordinary share capital of C or of any company which is a member of a group of companies of which C is a member, or

(ii) P and any relevant connected person together hold 5% or more of the voting rights in C or in any company which is a member of a group of companies of which C is a member.]

F7 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F8 (1A) Where—

(a) subsection (1)(aa) applies by virtue of P's ownership, or any relevant connected person's ownership, of C's ordinary share capital, and

(b) the conditions mentioned in subsection (1B) are met,

subsection (4) does not apply.

(1B) The conditions referred to in subsection (1A)(b) are—

(a) P and any relevant connected person dispose of C's ordinary share capital to another company (“A”) such that, immediately before the end of the relevant period, neither P nor any relevant connected person own any of C's ordinary share capital, and

(b) where A is a close company, immediately before the end of the relevant period—

(i) P and any relevant connected person together own less than 5% of the ordinary share capital of A or of any company which is a member of a group of companies of which A is a member, and

(ii) P and any relevant connected person together hold less than 5% of the voting rights in A or in any company which is a member of a group of companies of which A is a member.

(1C) In subsection (1B) “the relevant period” means the period of 28 days beginning with the date of the qualifying business disposal, or such longer period as the Commissioners for Her Majesty's Revenue and Customs may by notice allow.]

F9 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) For the purposes of this Chapter, the goodwill is not one of the relevant business assets comprised in the qualifying business disposal.

(5) If a company—

(a) is not resident in the United Kingdom, but

(b) would be a close company if it were resident in the United Kingdom,

the company is to be treated as being a close company for the purposes of this section F10 ... .

(6) If a person—

(a) disposes of goodwill as part of a qualifying business disposal, and

(b) is party to relevant avoidance arrangements,

subsection (4) applies (if it would not otherwise do so).

(7) In subsection (6) “relevant avoidance arrangements” means arrangements the main purpose, or one of the main purposes, of which is to secure—

(a) that subsection (4) does not apply in relation to the goodwill, F11 ...

F11 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) In this section—

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

• [F12 “group” is to be construed in accordance with section 170;]

• [F13 “relevant connected person” means—

  (a)

  a company connected with P, and

  (b)

  trustees connected with P.]]]

Textual Amendments

F1 Pt. 5 Ch. 3 inserted (with effect in accordance with Sch. 3 para. 5 of the amending Act) by Finance Act 2008 (c. 9), Sch. 3 para. 2 (with Sch. 3 paras. 6-8)

F2 S. 169LA inserted (with effect in accordance with s. 42(5) of the amending Act) by Finance Act 2015 (c. 11), s. 42(4)

F3 Words in s. 169LA heading substituted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(8)

F4 Words in s. 169LA(1) inserted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(2)(a)

F5 Word in s. 169LA(1)(a) inserted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(2)(b)

F6 S. 169LA(1)(aa) inserted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(2)(c)

F7 S. 169LA(1)(b)(c) omitted (with effect in accordance with s. 85(9) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 85(2)(d)

F8 S. 169LA(1A)-(1C) inserted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(3)

F9 S. 169LA(2)(3) omitted (with effect in accordance with s. 85(9) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 85(4)

F10 Words in s. 169LA(5) omitted (with effect in accordance with s. 85(9) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 85(5)

F11 S. 169LA(7)(b) and preceding word omitted (with effect in accordance with s. 85(9) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 85(6)

F12 Words in s. 169LA(8) inserted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(7)(a)

F13 Words in s. 169LA(8) substituted (with effect in accordance with s. 85(9) of the amending Act) by Finance Act 2016 (c. 24), s. 85(7)(b)