Finance Act 2000

3 (1) Chapter VI of Part XIII of the Taxes Act 1988 (relief on losses on shares in trading companies etc.) is amended as follows.

(2) In section 573 (relief for losses incurred by investment companies on disposals of shares in qualifying trading companies)—

(a) in subsection (4)—

(i) for “Relief under subsection (2) above shall be given before any deduction for” substitute “Where relief is claimed under subsection (2) above, it must be claimed before any deduction is made for”;

(ii) for “is given” substitute “is obtained”;

(iii) for “in respect of the amount” substitute “for an amount”; and

(iv) at the end insert—

“This subsection is subject to subsection (4A) below.”;

and

(b) after that subsection insert—

“(4A) Paragraph 70 of Schedule 15 to the Finance Act 2000 (priority of loss relief) provides that where relief under Part VII of that Schedule (relief for losses on disposals of shares to which investment relief is attributable) is claimed it must be claimed in priority to relief under subsection (2) above.”

(3) In section 575(1) (which restricts the disposals in respect of which relief for losses can be obtained), after paragraph (b) insert—

“(ba) a disposal within section 24(1) of the 1992 Act (entire loss, destruction, dissipation or extinction of asset); or”.

(4) In section 576—

(a) in subsection (1) for “and (1B)” substitute “to (1C)”; and

(b) after subsection (1B) insert—

“(1C) Where the holding mentioned in subsection (1) above comprises any shares—

(a) to which investment relief is attributable under Schedule 15 to the Finance Act 2000 (corporate venturing scheme), and

(b) which have been held continuously (within the meaning of paragraph 97 of that Schedule) from the time they were issued until the disposal,

any such question as is mentioned in that subsection shall not be determined as provided by that subsection, but shall be determined instead as provided by paragraph 93 of that Schedule (identification of shares on a disposal of part of a holding where investment relief is attributable to any shares in the holding held continuously by the disposing company).

For this purpose paragraph 93 of that Schedule shall have effect as if the references in it to a disposal had the same meaning as in subsection (1) above.”