Finance Act 1993

[F1 Capital gains tax: roll-over relief on disposal of assets of ancillary trust fund U.K.

Textual Amendments

F1 Sch. 20A inserted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 25 para. 3

4 (1) This paragraph applies if— U.K.

(a) at the time of, or after, the syndicate capacity disposal, assets forming some or all of the member’s ancillary trust fund are—

(i) withdrawn from the fund, and

(ii) without unreasonable delay, disposed of by him to the successor company (the “ATF disposal”),

(b) the aggregate of any chargeable gains accruing to the member on the ATF disposal exceeds the aggregate of any allowable losses accruing to him on that disposal,

(c) throughout the period beginning with the time of the syndicate capacity disposal and ending with the time of the ATF disposal,—

(i) the member controls the successor company, and

(ii) more than 50% of the ordinary share capital of the successor company is beneficially owned by the member,

(d) the ATF disposal is made in consideration solely of the issue to the member of shares (the “issued shares”) in the successor company, and

(e) the member makes a claim under this paragraph to an officer of the Board.

(2) But this paragraph does not apply if—

(a) the member could have made a claim under paragraph 3 above, and

(b) at the time the member makes a claim under this paragraph, no claim under paragraph 3 above is or has been made by him.

(3) The amount of the excess mentioned in sub-paragraph (1)(b) above (“the amount of the ATF assets gain”) shall for the purposes of capital gains tax be reduced by the amount of the rolled-over gain.

(4) For the purpose of computing any chargeable gain accruing to the member on a disposal by him of any issued share or any asset directly or indirectly derived from any issued share—

(a) the amount of the rolled-over gain shall be apportioned between the issued shares as a whole, and

(b) the sums allowable as a deduction under section 38(1)(a) of the Gains Tax Act shall be reduced by the amount apportioned to the issued share under paragraph (a) above; but, in the case of a derived asset, the reduction shall be by an appropriate proportion of that amount;

and if the issued shares are not all of the same class, the apportionment between the shares under paragraph (a) above shall be in accordance with their market values at the time they were acquired by the member.

(5) In this paragraph “the amount of the rolled-over gain” means the lesser of—

(a) subject to sub-paragraph (6) below, the amount of the ATF assets gain, and

(b) the aggregate amount of any sums which would be allowable as a deduction under section 38(1)(a) of the Gains Tax Act if the issued shares were disposed of as a whole by the member in circumstances giving rise to a chargeable gain.

(6) If the market value, immediately before the ATF disposal, of the assets disposed of under that disposal exceeds [F4 120% of] the amount of the ATF assets required, the amount of the ATF assets gain shall for the purposes of sub-paragraph (5)(a) above be reduced by multiplying it by—

where—

R is the amount of the ATF assets required, and

T is the market value, immediately before the ATF disposal, of the assets disposed of under that disposal.

(7) In sub-paragraph (6) above “the amount of the ATF assets required” means the [F5 appropriate percentage of the amount of security required to be provided by the successor company in respect of its underwriting business in the underwriting year in which the ATF disposal is made.]

[F6 (7A) In sub-paragraph (7) above “the appropriate percentage” means the percentage that equates to the percentage of the ordinary share capital of the successor company that is beneficially owned by the member immediately before the ATF disposal.]

(8) This paragraph applies only on the first occasion on or after 6th April 2004 on which the member makes an ATF disposal.

(9) If a claim made by the member under paragraph 3 above is revoked, this paragraph shall apply as if the claim had never been made.]

Textual Amendments

F4 Words in Sch. 20A para. 4(6) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Roll-over Relief on Disposal of Assets of Ancillary Trust Fund) (Tax) Regulations 2016 (S.I. 2016/597), regs. 1(1), 4(a)

F5 Words in Sch. 20A para. 4(7) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Roll-over Relief on Disposal of Assets of Ancillary Trust Fund) (Tax) Regulations 2016 (S.I. 2016/597), regs. 1(1), 4(b)

F6 Sch. 20A para. 4(7A) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Roll-over Relief on Disposal of Assets of Ancillary Trust Fund) (Tax) Regulations 2016 (S.I. 2016/597), regs. 1(1), 4(c)