25(1)The rules in sections 116 to 118 apply in relation to anything occurring on or after 1 January 2013 (and the rules in section 440 of ICTA, including as modified, apply in relation to anything occurring before that date).U.K.
(2)Accordingly, the replacement of the rules in section 440 of ICTA with the different rules in sections 116 to 118 is not by itself sufficient to give rise to a deemed disposal and re-acquisition for the purposes of corporation tax on chargeable gains.
26(1)The rules in sections 119 to 121 apply in relation to securities held on or after 1 January 2013 (and the rules in section 440A of ICTA, including as modified, apply in relation to securities held before that date).U.K.
(2)The replacement of the separate holdings given by section 440A of ICTA (including as modified) with the separate holdings given by sections 119 to 121 is, for the purposes of corporation tax on chargeable gains, not to be treated as involving a disposal or acquisition that gives rise to a chargeable gain or allowable loss.
(3)But see paragraph 27 for provision for carrying forward the base cost of the old holdings into the base cost of the new holdings.
27(1)This paragraph applies if—U.K.
(a)immediately before 1 January 2013 securities are treated, as a result of section 440A of ICTA (including as modified), as separate holdings of a company for the purposes of corporation tax, and
(b)the securities that are comprised in those separate holdings (the “old holdings”) are, as at 1 January 2013, comprised in separate holdings of the company as determined by the rules in sections 119 to 121 (the “new holdings”).
(2)Each new holding is treated for the purposes of corporation tax on chargeable gains as if it were a holding of the company with a base cost and an indexation allowance as at 1 January 2013 equal to the total of the base costs and indexation allowances of the old holdings that are carried into the new holding.
(3)In the case of securities (“new securities”) comprised in a new holding, the amount of the base cost or indexation allowance of an old holding that is carried into the new holding is equal to the proportion which the new securities derived from the old holding bear to all of the securities comprised in the old holding.
(4)For the purpose of calculating the indexation allowance of a new holding in respect of any period falling on or after 1 January 2013, it is to be assumed that, on that date, there had been a disposal of the holding for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the company.
(5)For the purposes of this paragraph—
(a)references to a base cost are—
(i)in the case of a section 104 holding, references to the amount of qualifying expenditure within the meaning of section 110 of TCGA 1992, and
(ii)in the case of a 1982 holding, references to the amount of expenditure that would fall to be deducted if the holding were disposed of,
(b)references to an indexation allowance are—
(i)in the case of a section 104 holding, references to the indexation allowance as found in accordance with section 110 of TCGA 1992, and
(ii)in the case of a 1982 holding, references to the indexation allowance within the meaning of Chapter 4 of Part 2 of that Act,
(c)the base cost and the indexation allowance of an old holding are calculated on the assumption that the holding is disposed of immediately before 1 January 2013,
(d)“section 104 holding” has the same meaning as in section 104(3) of TCGA 1992, and
(e)“1982 holding” has the same meaning as in section 109 of that Act.
28(1)This paragraph applies in a case where—U.K.
(a)section 210B(2) to (4) of TCGA 1992 would, but for this Part of this Act, have applied in relation to a disposal and acquisition of section 440A securities, and
(b)the identification in accordance with those subsections of the section 440A securities disposed of with the section 440A securities acquired would have involved—
(i)identifying securities disposed of before 1 January 2013 with securities acquired on or after that date, or
(ii)identifying securities acquired before 1 January 2013 with securities disposed of on or after that date.
(2)The securities disposed of are to be identified with the securities acquired (if necessary applying the rules in section 210B(3) and (4) of TCGA 1992 and subject to section 105(1) of that Act), and—
(a)in a case within sub-paragraph (1)(b)(i), the securities acquired are not therefore to be comprised in a separate holding of securities within any of sections 119 to 121 of this Act, and
(b)in a case within sub-paragraph (1)(b)(ii), the securities acquired are not therefore to be regarded as comprised in a separate holding of securities within section 440A of ICTA (including as applied).
(3)In this paragraph “section 440A securities” has the same meaning as in section 210B of TCGA 1992.