Finance Act 2000

Receipt of replacement value U.K.

54 (1) Where—

(a) any investment relief attributable to the relevant shares would, in the absence of this paragraph, be reduced or withdrawn under paragraph 47 by reason of a receipt of value within paragraph 49(1) (“the original value”),

(b) the original supplier receives value (“the replacement value”) from the original recipient by reason of a qualifying receipt, and

(c) [F1 the amount of]the replacement value is not less than the amount of the original value,

paragraph 47 shall not, by reason of the receipt of the original value, have effect to reduce or withdraw the investment relief.

(2) For the purposes of this paragraph and paragraph 55—

• “the original recipient” means the person who receives the original value; and

• “the original supplier” means the person from whom that value was received.

(3) A receipt of the replacement value is a qualifying receipt for the purposes of sub-paragraph (1) if it arises—

(a) by reason of the original recipient making a payment to the original supplier other than—

(i) a qualifying payment (within the meaning of paragraph 49(5)), or

(ii) a payment for shares in or securities of any company in circumstances that do not fall within paragraph (c) below;

(b) where the receipt of the original value was within paragraph 49(1)(d), by reason of an event the effect of which is to reverse the event which constituted the receipt of the original value; or

(c) where the receipt of the original value was within paragraph 49(1)(g) or (h), by reason of—

(i) the original recipient acquiring any asset from the original supplier for a consideration which is or the value of which is more than the market value of the asset, or

(ii) the original recipient disposing of any asset to the original supplier for no consideration or for a consideration which is, or the value of which is, less than the market value of the asset.

(4) For the purposes of this paragraph—

(a) paragraph 50 shall apply for the purposes of determining the amount of the original value; and

(b) the amount of the replacement value is—

(i) in a case within sub-paragraph (3)(a), the amount of the payment,

(ii) in a case within sub-paragraph (3)(b), the same as the amount of the original value, and

(iii) in a case within sub-paragraph (3)(c), the difference between the market value of the asset and the consideration (if any) received for it.

Textual Amendments

F1 Words in Sch. 15 para. 54(1)(a) inserted (retrospectively) by 2001 c. 9, s. 64, Sch. 16 Pt. 2 para. 6(1)(6)

54 (1) Where—

(a) any investment relief attributable to the relevant shares would, in the absence of this paragraph, be reduced or withdrawn under paragraph 47 by reason of a receipt of value within paragraph 49(1) (“the original value”),

(b) the original supplier receives value (“the replacement value”) from the original recipient by reason of a qualifying receipt, and

(c) the replacement value is not less than the amount of the original value,

paragraph 47 shall not, by reason of the receipt of the original value, have effect to reduce or withdraw the investment relief.

(2) For the purposes of this paragraph and paragraph 55—

• “the original recipient” means the person who receives the original value; and

• “the original supplier” means the person from whom that value was received.

(3) A receipt of the replacement value is a qualifying receipt for the purposes of sub-paragraph (1) if it arises—

(a) by reason of the original recipient making a payment to the original supplier other than—

(i) a qualifying payment (within the meaning of paragraph 49(5)), or

(ii) a payment for shares in or securities of any company in circumstances that do not fall within paragraph (c) below;

(b) where the receipt of the original value was within paragraph 49(1)(d), by reason of an event the effect of which is to reverse the event which constituted the receipt of the original value; or

(c) where the receipt of the original value was within paragraph 49(1)(g) or (h), by reason of—

(i) the original recipient acquiring any asset from the original supplier for a consideration which is or the value of which is more than the market value of the asset, or

(ii) the original recipient disposing of any asset to the original supplier for no consideration or for a consideration which is, or the value of which is, less than the market value of the asset.

(4) For the purposes of this paragraph—

(a) paragraph 50 shall apply for the purposes of determining the amount of the original value; and

(b) the amount of the replacement value is—

(i) in a case within sub-paragraph (3)(a), the amount of the payment,

(ii) in a case within sub-paragraph (3)(b), the same as the amount of the original value, and

(iii) in a case within sub-paragraph (3)(c), the difference between the market value of the asset and the consideration (if any) received for it.