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Taxation of Chargeable Gains Act 1992

Type Public General Act

Publication 1992-03-06

Last updated 2026-09-19

State In force

Department Statute Law Database

Source legislation.gov.uk

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An Act to consolidate certain enactments relating to the taxation of chargeable gains.

Reform history JSON API

(b) to any bodies mentioned in Schedule 3 to the Inheritance Tax Act 1984 (gifts for national purposes, etc)

and the disposal is not one in relation to which section 151A(1) has effect.

(2) Sections 17(1) and 258(3) shall not apply; but if the disposal is by way of gift (including a gift in settlement) or for a consideration not exceeding the sums allowable as a deduction under section 38, then—

(a) the disposal and acquisition shall be treated for the purposes of this Act as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal, and

(b) where, after the disposal, the asset is disposed of by the person who acquired it under the disposal, its acquisition by the person making the earlier disposal shall be treated for the purposes of this Act as the acquisition of the person making the later disposal.

(2A) Subsection (2B) applies if relief is available under Chapter 3 of Part 8 of ITA 2007 or as a result of Chapter 3 of Part 6 of CTA 2010 (gifts of shares, securities and real property to charities) in relation to the disposal of a qualifying investment to a charity (whether or not a claim for relief is actually made).

(2B) The consideration for which the charity's acquisition of the qualifying investment is treated by virtue of subsection (2) above as having been made—

(a) is reduced by the relievable amount within the meaning of Chapter 3 of Part 8 of ITA 2007 if relief in relation to the disposal is available only under that Chapter,

(b) is reduced by the relievable amount within the meaning of Chapter 3 of Part 6 of CTA 2010 if relief in relation to the disposal is available only as a result of that Chapter,

(c) is reduced by the relievable amount within the meaning of Chapter 3 of Part 8 of ITA 2007 if relief in relation to the disposal is available both under that Chapter and as a result of Chapter 3 of Part 6 of CTA 2010 because of section 442 of ITA 2007 and section 214 of CTA 2010, or

(d) is reduced to nil if that consideration is less than the amount referred to in paragraph (a), (b) or (c) (as the case may be).

(2C) In subsections (2A) and (2B)—

“qualifying investment” has the same meaning as in Chapter 3 of Part 8 of ITA 2007 (see section 432 of that Act),

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(3) Where—

(a) otherwise than on the termination of a life interest (within the meaning of section 72) by the death of the person entitled thereto, any assets or parts of any assets forming part of settled property are, under section 71, deemed to be disposed of and reacquired by the trustee, and

(b) the person becoming entitled as mentioned in section 71(1) is a charity, a registered club or a body mentioned in Schedule 3 to the Inheritance Tax Act 1984 (gifts for national purposes, etc),

then, if no consideration is received by any person for or in connection with any transaction by virtue of which the charity, registered club or other body becomes so entitled, the disposal and reacquisition of the assets to which the charity, registered club or other body becomes so entitled shall, notwithstanding section 71, be treated for the purposes of this Act as made for such consideration as to secure that neither a gain nor a loss accrues on the disposal.

(4) In subsection (2)(b) above the first reference to a disposal includes a disposal to which section 146(2) of the 1979 Act applied where the person who acquired the asset on that disposal disposes of the asset after the coming into force of this section.

(5) For the purposes of this section “registered club” has the same meaning as in Chapter 9 of Part 13 of CTA 2010.

Tainted charity donations

257A

(1) Section 257 does not apply in relation to a relievable charity donation that becomes a tainted donation in the same tax year in which it is made.

(2) Subsection (3) applies if—

(a) a person makes a relievable charity donation in a tax year (“the donation year”),

(b) the donation becomes a tainted donation in a later tax year (“the tainting year”), and

(c) if the donation had become a tainted donation in the donation year, the liability to tax for the donation year of the person who made the donation would have been greater than it in fact was for the donation year.

(3) The liability to tax for the tainting year of the person that made the donation is increased by an amount equal to the difference between—

(a) the amount of tax for which the person would have been liable for the donation year had the donation become a tainted donation in the donation year, and

(b) the amount of tax for which the person was in fact liable for the donation year.

(4) Section 101 of FA 2009 (interest on CGT etc) has effect in relation to capital gains tax for which a person is liable by virtue of subsection (3) as though the tax had become due and payable on 1 February in the tax year following the donation year.

(5) Section 87A of TMA 1970 (interest on overdue corporation tax etc) has effect in relation to corporation tax for which a company is liable by virtue of subsection (3) as though the tax had become due and payable on the day following the expiry of 9 months from the end of the accounting period of the company in which the donation mentioned in subsection (2)(a) was made.

(6) In this section—

“relievable charity donation” means a relievable charity donation within the meaning of Chapter 8 of Part 13 of ITA 2007 or Part 21C of CTA 2010;

“tainted donation” means a tainted donation within the meaning of Chapter 8 of Part 13 of ITA 2007 or Part 21C of CTA 2010;

“tax” means—in relation to a company, corporation tax on chargeable gains;otherwise, capital gains tax;

and a reference to a donation “becoming” a tainted donation is to be read with section 809ZJ(1)(b) of ITA 2007 and 939C(1)(b) of CTA 2010.

(7) In relation to any donation made by a company, references in this section to a tax year are to be read as references to an accounting period.

Associated donations in relation to tainted charity donations

257B

(1) This section applies where—

(a) a person makes a relievable charity donation that becomes a tainted donation, and

(b) a person makes an associated donation in relation to the tainted donation.

(2) If the donation mentioned in subsection (1)(a) becomes a tainted donation before the end of the tax year in which the associated donation is made, section 257 does not apply in relation to the associated donation.

(3) Subsection (4) applies where—

(a) the donation mentioned in subsection (1)(a) becomes a tainted donation after the end of the tax year in which the associated donation is made, and

(b) if the donation had become a tainted donation before the end of that tax year, the liability to tax for that tax year of the person who made the associated donation would have been greater than it in fact was for that tax year.

(4) The liability to tax of the person who made the associated donation, for the tax year in which the donation mentioned in subsection (1)(a) becomes a tainted donation, is increased by an amount equal to the difference between—

(a) the amount of tax for which the person would have been liable for the tax year in which the associated donation was made had the donation mentioned in subsection (1)(a) become a tainted donation before the end of that tax year, and

(b) the amount of tax for which the person was in fact liable for the tax year in which the associated donation was made.

(5) Subsection (4) does not apply in relation to an associated donation if the person who makes the associated donation—

(a) is already liable for tax by virtue of that subsection by reference to the tax year in which the associated donation was made, or

(b) is liable for tax by virtue of section 257A(3) by reference to that tax year,

and for that purpose the tax year “by reference to which” a person is liable for tax is the earlier tax year for which the person’s liability falls to be considered under (as the case may be) subsection (4)(a) and (b) or section 257A(3)(a) and (b).

(6) Section 101 of FA 2009 (interest on CGT etc) has effect in relation to capital gains tax for which a person is liable by virtue of subsection (4) as though the tax had become due and payable on 1 February in the tax year following the tax year in which the associated donation was made.

(7) Section 87A of TMA 1970 (interest on overdue corporation tax etc) has effect in relation to corporation tax for which a company is liable by virtue of subsection (4) as though the tax had become due and payable on the day following the expiry of 9 months from the end of the accounting period of the company in which the associated donation was made.

(8) In this section—

“associated donation” means an associated donation within the meaning of section 809ZMB of ITA 2007 or section 939FB of CTA 2010;

“relievable charity donation” means a relievable charity donation within the meaning of Chapter 8 of Part 13 of ITA 2007 or Part 21C of CTA 2010;

“tainted donation” means a tainted donation within the meaning of Chapter 8 of Part 13 of ITA 2007 or Part 21C of CTA 2010;

“tax” means—in relation to a company, corporation tax on chargeable gains;otherwise, capital gains tax;

and a reference to a donation “becoming” a tainted donation is to be read with section 809ZJ(1)(b) of ITA 2007 and 939C(1)(b) of CTA 2010.

(9) Where the associated donation mentioned in subsection (1)(b) is made by a company, references in this section to a tax year are to be read as references to an accounting period of the company.

Works of art etc.

258

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1A) A gain is not a chargeable gain if it accrues on a disposal made in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to the nation).

(2) A gain shall not be a chargeable gain if it accrues on the disposal of an asset which is property which has been or could be designated under section 31 of the Inheritance Tax Act 1984 (“the 1984 Act”) (designation and undertakings) and—

(a) the disposal is by way of sale by private treaty to a body mentioned in Schedule 3 to the 1984 Act (museums, etc.), or is to such a body otherwise than by sale, or

(b) the disposal is to the Board in pursuance of section 230 of the 1984 Act ... (acceptance of property in satisfaction of tax).

(3) Subsection (4) below shall have effect in respect of the disposal of any asset which is property which has been or could be designated under section 31 of the 1984 Act, being—

(a) a disposal by way of gift, including a gift in settlement, or

(b) a disposal of settled property by the trustee on an occasion when, under section 71(1), the trustee is deemed to dispose of and immediately reacquire settled property (other than any disposal on which by virtue of section 73 no chargeable gain or allowable loss accrues to the trustee),

if the requisite undertaking described in section 31 of the 1984 Act (maintenance, preservation and access) is given by such person as the Board think appropriate in the circumstances of the case.

(4) The person making a disposal to which subsection (3) above applies and the person acquiring the asset on the disposal shall be treated for all the purposes of this Act as if the asset was acquired from the one making the disposal for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss would accrue to the one making the disposal.

(5) If—

(a) there is a sale of the asset and inheritance tax is chargeable under section 32 of the 1984 Act (or would be chargeable if an inheritance tax undertaking as well as an undertaking under this section had been given), or

(b) the Board are satisfied that at any time during the period for which any such undertaking was given it has not been observed in a material respect,

the person selling that asset or, as the case may be, the owner of the asset shall be treated for the purposes of this Act as having sold the asset for a consideration equal to its market value, and, in the case of a failure to comply with the undertaking, having immediately reacquired it for a consideration equal to its market value.

(6) The period for which an undertaking under this section is given shall be until the person beneficially entitled to the asset dies or it is disposed of, whether by sale or gift or otherwise; and if the asset subject to the undertaking is disposed of—

(a) otherwise than on sale, and

(b) without a further undertaking being given under this section,

subsection (5) above shall apply as if the asset had been sold to an individual.

References in this subsection to a disposal shall be construed without regard to any provision of this Act under which an asset is deemed to be disposed of.

(7) Where under subsection (5) above a person is treated as having sold for a consideration equal to its market value any asset within section 31(1)(c), (d) or (e) of the 1984 Act, he shall also be treated as having sold and immediately reacquired for a consideration equal to its market value any asset associated with it; but the Board may direct that the preceding provisions of this subsection shall not have effect in any case in which it appears to them that the entity consisting of the asset and any assets associated with it has not been materially affected.

For the purposes of this subsection 2 or more assets are associated with each other if one of them is a building falling within section 31(1)(c) of the 1984 Act and the other or others such land or objects as, in relation to that building, fall within section 31(1)(d) or (e) of the 1984 Act.

(8) If in pursuance of subsection (5) above a person is treated as having on any occasion sold an asset and inheritance tax becomes chargeable on the same occasion, then, in determining the value of the asset for the purposes of that tax, an allowance shall be made for the capital gains tax chargeable on any chargeable gain accruing on that occasion.

(8A) Section 35A of the 1984 Act (variation of undertakings) shall have effect in relation to an undertaking given under this section as it has effect in relation to an undertaking given under section 30 of that Act.

(9) In this section “inheritance tax undertaking” means an undertaking under Chapter II of Part II or section 78 of, or Schedule 5 to, the 1984 Act.

Gifts to housing associations.

259

(1) Subsection (2) below shall apply where—

(a) a disposal of an estate or interest in land in the United Kingdom is made to a relevant housing provider otherwise than under a bargain at arm’s length, and

(b) a claim for relief under this section is made by the transferor and the relevant housing provider.

(2) Section 17(1) shall not apply; but if the disposal is by way of gift or for a consideration not exceeding the sums allowable as a deduction under section 38, then—

(a) the disposal and acquisition shall be treated for the purposes of this Act as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal, and

(b) where, after the disposal, the estate or interest is disposed of by the relevant housing provider, its acquisition by the person making the earlier disposal shall be treated for the purposes of this Act as the acquisition of the relevant housing provider.

(3) In this section “relevant housing provider” means—

(a) a non-profit registered provider of social housing,

(b) a registered social landlord within the meaning of Part 1 of the Housing Act 1996,

(d) a registered housing association within the meaning of Part 2 of the Housing (Northern Ireland) Order 1992.

(4) In subsection (2)(b) above the first reference to a disposal includes a disposal to which section 146A(2) of the 1979 Act applied where the association which acquired the estate or interest in land on that disposal disposes of it after the coming into force of this section.

Gifts on which inheritance tax is chargeable etc.

260

(1) If—

(a) an individual or the trustees of a settlement (“the transferor”) make a disposal within subsection (2) below of an asset,

(b) the asset is acquired by an individual or the trustees of a settlement (“the transferee”), and

(c) a claim for relief under this section is made by the transferor and the transferee or, where the trustees of a settlement are the transferee, by the transferor alone,

then, subject to subsection (6) below and sections 169, 169B, 169C, 261 and 261ZA, subsection (3) below shall apply in relation to the disposal.

(2) A disposal is within this subsection if it is made otherwise than under a bargain at arm’s length and—

(a) is a chargeable transfer within the meaning of the Inheritance Tax Act 1984 (or would be but for section 19 of that Act) and is not a potentially exempt transfer (within the meaning of that Act),

(b) is an exempt transfer by virtue of—

(i) section 24 of that Act (transfers to political parties),

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii) section 27 of that Act (transfers to maintenance funds for historic buildings etc.), or

(iv) section 30 of that Act (transfers of designated property),

(c) is a disposition to which section 57A of that Act applies and by which the property disposed of becomes held on trusts of the kind referred to in subsection (1)(b) of that section (maintenance funds for historic buildings etc.),

(d) by virtue of subsection (4) of section 71 of that Act (accumulation and maintenance trusts) does not constitute an occasion on which inheritance tax is chargeable under that section,

(da) by virtue of subsection (2) of section 71B of that Act (trusts for bereaved minors) does not constitute an occasion on which inheritance tax is chargeable under that section,

(db) by virtue of subsection (2) of section 71E of that Act (age 18-to-25 trusts) does not constitute an occasion on which inheritance tax is charged under that section,

(e) by virtue of section 78(1) of that Act (transfers of works of art etc.) does not constitute an occasion on which tax is chargeable under Chapter III of Part III of that Act, or

(f) is a disposal of an asset comprised in a settlement where, as a result of the asset or part of it becoming comprised in another settlement, there is no charge, or a reduced charge, to inheritance tax by virtue of paragraph 9, 16 or 17 of Schedule 4 to that Act (transfers to maintenance funds for historic buildings etc.).

(3) Where this subsection applies in relation to a disposal—

(a) the amount of any chargeable gain which, apart from this section, would accrue to the transferor on the disposal, and

(b) the amount of the consideration for which, apart from this section, the transferee would be regarded for the purposes of capital gains tax as having acquired the asset in question,

shall each be reduced by an amount equal to the held-over gain on the disposal.

(4) Subject to subsection (5) below, the reference in subsection (3) above to the held-over gain on a disposal is a reference to the chargeable gain which would have accrued on that disposal apart from this section.

(5) In any case where—

(a) there is actual consideration (as opposed to the consideration equal to the market value which is deemed to be given by virtue of any provision of this Act) for a disposal in respect of which a claim for relief is made under this section, and

(b) that actual consideration exceeds the sums allowable as a deduction under section 38,

the held-over gain on the disposal shall be reduced by the excess referred to in paragraph (b) above ... .

(6) Subsection (3) above does not apply in relation to a disposal of assets within section 115(1) on which a gain is deemed to accrue by virtue of section 116(10)(b).

(6ZA) Subsections (6ZB) and (6ZC) apply in any case where—

(a) the disposal is a direct or indirect disposal of UK land which meets the non-residence condition, and

(b) the transferee is resident in the United Kingdom.

(6ZB) Subsections (3) and (4) have effect in relation to the disposal as if the reference to “chargeable gain” were a reference to “so much of any gain accruing on the disposal as falls to be dealt with as mentioned in subsection (6ZD)(a) or (b)”.

(6ZC) Subsection (5) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to “so much of the gain mentioned in subsection (6ZB) which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”.

(6ZD) For the purposes of subsections (6ZA) to (6ZC) a disposal is a “direct or indirect disposal of UK land which meets the non-residence condition” if it is—

(a) a disposal on which a gain accrues that falls to be dealt with by section 1A(3) because the asset disposed of is within paragraph (b) or (c) of that subsection, or

(b) a disposal on which a gain accrues that falls to be dealt with by section 1A(1) in accordance with section 1G(2) because the asset disposed of is within section 1A(3)(b) or (c).

(6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In the case of a disposal within subsection (2)(a) above (whether or not subsection (3) above applies in relation to it) there shall be allowed as a deduction in computing the chargeable gain accruing to the transferee on the disposal of the asset in question an amount equal to whichever is the lesser of—

(a) the inheritance tax attributable to the value of the asset; and

(b) the amount of the chargeable gain as computed apart from this subsection.

(8) Where an amount of inheritance tax is varied after it has been taken into account under subsection (7) above, all necessary adjustments shall be made, whether by the making of an assessment to capital gains tax or by the discharge or repayment of such tax.

(9) Where subsection (3) above applies in relation to a disposal which is deemed to occur by virtue of section 71(1) or 72(1), subsection (5) above shall not apply.

(10) Where a disposal is partly within subsection (2) above, or is a disposal within paragraph (f) of that subsection on which there is a reduced charge such as is mentioned in that paragraph, the preceding provisions of this section shall have effect in relation to an appropriate part of the disposal.

Section 260 relief: gifts to non-residents.

261

(1) Subject to section 261ZA, section 260(3) shall not apply where the transferee is not resident in the United Kingdom.

(2) Section 260(3) shall not apply where the transferee is an individual who—

(a) though resident ... in the United Kingdom, is regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom, and

(b) by virtue of the arrangements would not be liable in the United Kingdom to tax on a gain arising on a disposal of the asset occurring immediately after its acquisition.

Gifts of direct or indirect interests in UK land to non-residents

261ZA

(1) This section applies where the disposal in relation to which a claim could be made under section 260 is a disposal of an asset within section 1A(3)(b) or (c) to a transferee who is not resident in the United Kingdom and, ignoring section 260—

(a) a gain would accrue to the transferor on the disposal, and

(b) on the assumption that the disposal is a direct or indirect disposal of UK land which meets the non-residence condition (whether or not that is the case), that gain would be a relevant gain (see subsections (6) and (7)).

(2) Section 260(3) has effect in relation to the disposal as if it read—

(3) Where this subsection applies in relation to a disposal, the amount of any chargeable gain which, apart from this section, would accrue to the transferor on the disposal, shall be reduced by an amount equal to the held-over gain on the disposal.

(3) Where the disposal is a direct or indirect disposal of UK land which meets the non-residence condition—

(a) section 260(3), as modified by subsection (2) of this section, and section 260(4) have effect in relation to the disposal as if the references to “chargeable gain” were references to “relevant gain”, and

(b) section 260(5) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to “the relevant gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”.

(4) Where a claim for relief is made under section 260 in relation to the disposal mentioned in subsection (1), on a subsequent disposal by the transferee of the whole or part of the asset within section 1A(3)(b) or (c) which is the subject of the disposal mentioned in subsection (1), the whole or a corresponding part of the held-over gain (see section 260(4))—

(a) is deemed to accrue to the transferee (in addition to any gain or loss that actually accrues on that subsequent disposal), and

(b) (if that would not otherwise be the case) is to be treated as a relevant gain accruing on a direct or indirect disposal of UK land which meets the non-residence condition.

(5) Where the subsequent disposal mentioned in subsection (4) is a disposal within section 260(2)(a), subsection (7) of that section has effect in relation to the disposal as if—

(a) the reference to “the chargeable gain accruing to the transferee on the disposal of the asset” were a reference to the chargeable gain accruing on the disposal as computed apart from subsection (4), and

(b) the reference in section 260(7)(b) to “the chargeable gain” were a reference to—

(i) the chargeable gain (or, where the disposal is a direct or indirect disposal of UK land which meets the non-residence condition, the relevant gain) accruing on the disposal, and

(ii) the held-over gain deemed to accrue under subsection (4).

(6) For the purposes of this section, a disposal is a “direct or indirect disposal of UK land which meets the non-residence condition” if it is—

(a) a disposal on which a gain accrues that falls to be dealt with by section 1A(3) because the asset disposed of is within paragraph (b) or (c) of that subsection, or

(b) a disposal on which a gain accrues that falls to be dealt with by section 1A(1) in accordance with section 1G(2) because the asset disposed of is within section 1A(3)(b) or (c).

(7) For the purposes of this section, a “relevant gain” means so much of any chargeable gain accruing on a disposal as falls to be dealt with as mentioned in subsection (6)(a) or (b).

Know-how

Disposal of know-how as part of disposal of all or part of a trade

261A

(1) This section applies if—

(a) a person carrying on a trade receives consideration for the disposal of know-how which has been used in the trade, and

(b) the know-how is disposed of as part of the disposal of all or part of the trade.

(2) If, as a result of section 194 of ITTOIA 2005, the consideration is treated for income tax purposes as—

(a) a capital receipt for goodwill (in relation to the person disposing of the know-how), or

(b) a capital payment for goodwill (in relation to the person acquiring the know-how),

the consideration is treated for capital gains tax purposes in the same way.

(3) This section has effect as if it were contained in Chapter 14 of Part 2 of ITTOIA 2005.

Deduction of trading losses or post-cessation expenditure etc

Treating trade loss etc as CGT loss

261B

(1) A person may make a claim under this section if—

(a) relief is available to the person under section 64 or 128 of ITA 2007 (trade or employment loss relief against general income) for a tax year in relation to an amount of loss, and

(b) the person makes a claim under that section for the amount to be deducted in calculating the person's net income for the tax year.

(2) A person may also make a claim under this section if—

(a) relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount of loss, but

(b) the person's total income for the tax year is nil or does not include any income from which the amount can be deducted.

(3) A claim under this section is for determining so much of the amount of the loss (“the relevant amount”) as—

(a) is not deducted in calculating the person's net income for the tax year, and

(b) has not already been taken into account for the purposes of any relief for any other tax year or any year of assessment (whether under ITA 2007, this section or otherwise).

(4) When the relevant amount can no longer be varied—

(a) by the tribunal on appeal, or

(b) on the order of a court,

it is treated for the purposes of capital gains tax as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.

(5) But so much of the relevant amount as exceeds the maximum amount (see section 261C) is not to be treated for the purposes of capital gains tax as an allowable loss.

(6) The excess may, however, be used in giving effect to any other loss relief under Part 4 of ITA 2007 (depending on the terms of the relief).

(7) The amount treated as an allowable loss under this section—

(a) is no longer to be regarded as an amount available for income tax relief, and

(b) is not to be deductible from chargeable gains accruing to a person in any year of assessment that begins after the person has permanently ceased to carry on the trade, profession, vocation, employment or office in which the loss was made.

(8) A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the loss was made in the trade, profession, vocation, employment or office.

(9) In this section “normal self-assessment filing date”, “tax year” and “total income” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).

Meaning of “the maximum amount” for purposes of section 261B

261C

(1) For the purposes of section 261B “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if—

(a) the provisions mentioned below were ignored, and

(b) no account were taken of the event mentioned below.

(2) The provisions are—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) section 1K(1) (annual exempt amount), and

(3) The event is any event—

(a) which occurs after the date on which the relevant amount (see section 261B(3)) can no longer be varied by the tribunal on appeal or on the order of a court, and

(b) in consequence of which the amount chargeable to capital gains tax is reduced as a result of an enactment relating to capital gains tax.

Treating excess post-cessation trade or property relief as CGT loss

261D

(1) A person may make a claim under this section if—

(a) relief is available to the person under section 96 or 125 of ITA 2007 (post-cessation trade or property relief) for a tax year in relation to an amount, and

(b) the person makes a claim under that section to deduct the amount in calculating the person's net income for the tax year.

(2) A person may also make a claim under this section if—

(a) relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount, but

(b) the person's total income for the tax year is nil.

(3) A claim under this section is for treating for the purposes of capital gains tax so much of the amount as is not deducted in calculating the person's net income for the tax year (“the relevant amount”) as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.

(4) But so much of the relevant amount as exceeds the maximum amount (see section 261E) is not to be treated for the purposes of capital gains tax as an allowable loss.

(5) The relevant amount is no longer to be regarded as an amount available for income tax relief.

(6) A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year mentioned in subsection (1) or (2) (as the case may be).

(7) In this section “normal self-assessment filing date”, “tax year” and “total income” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).

Meaning of “the maximum amount” for purposes of section 261D

261E

(1) For the purposes of section 261D “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if the following were ignored.

(2) The matters to be ignored are—

(a) any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 1(3),

(b) section 1K(1) (annual exempt amount), and

Repurchase price under repos

Deemed manufactured payments: effect on repurchase price

261F

(1) This section applies if —

(a) the repurchase price of UK shares, UK securities or overseas securities is treated by section 604(2), (4) or (5) of ITA 2007 (deemed increase in repurchase price: repos and options) as increased for the purposes of section 607 of that Act (treatment of price differences under repos),

(b) condition A or B is met, and

(2) Condition A is that, as a result of the increase, there is no difference for the purposes of section 607 of that Act between the sale price and the repurchase price.

(3) Condition B is that, as a result of an exception in section 608 of that Act, section 607 of that Act does not apply.

(4) The deemed increase of the repurchase price also has effect for capital gains tax purposes.

(5) Expressions used in this section and in section 605 of ITA 2007 (deemed increase in repurchase price: other income tax purposes) have the same meanings in this section as in that section.

Price differences under repos: effect on repurchase price

261G

(1) Subsections (2) and (3) apply if—

(a) section 607 of ITA 2007 (treatment of price differences under repos) applies,

(b) an amount is treated under that section as a payment of interest, and

(2) If the repurchase price is more than the sale price, the repurchase price is treated for capital gains tax purposes as reduced by the amount of the payment of interest.

(3) If the sale price is more than the repurchase price, the repurchase price is treated for capital gains tax purposes as increased by the amount of the payment of interest.

(4) Expressions used in this section and in section 609 of ITA 2007 (additional income tax consequences of price differences under repos) have the same meanings in this section as in that section.

Power to modify section 261G in non-arm's length case

261H

(1) The Treasury may by regulations provide for section 261G to apply with modifications if the exception in section 608(2) of ITA 2007 (agreement not at arm's length) would otherwise prevent it from applying.

(2) Regulations under this section may make different provision for different cases.

(3) Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.

(4) The incidental, supplemental, and consequential provision may include modifications of section 261F (deemed manufactured payments: effect on repurchase price).

(5) In this section “modifications” includes exceptions and omissions.

(6) Accordingly, the power in subsection (1) includes power to provide for any provision of section 261G not to apply in relation to the case mentioned in that subsection.

Miscellaneous reliefs and exemptions

Chattel exemption.

262

(1) Subject to this section a gain accruing on a disposal of an asset which is tangible movable property shall not be a chargeable gain if the amount or value of the consideration for the disposal does not exceed £6,000.

(2) Where the amount or value of the consideration for the disposal of an asset which is tangible movable property exceeds £6,000, there shall be excluded from any chargeable gain accruing on the disposal so much of it as exceeds five-thirds of the difference between—

(a) the amount or value of the consideration, and

(b) £6,000.

(3) Subsections (1) and (2) above shall not affect the amount of an allowable loss accruing on the disposal of an asset, but for the purposes of computing under this Act the amount of a loss accruing on the disposal of tangible movable property the consideration for the disposal shall, if less than £6,000, be deemed to be £6,000 and the losses which are allowable losses shall be restricted accordingly.

(4) If 2 or more assets which have formed part of a set of articles of any description all owned at one time by one person are disposed of by that person, and—

(a) to the same person, or

(b) to persons who are acting in concert or who are connected persons,

whether on the same or different occasions, the 2 or more transactions shall be treated as a single transaction disposing of a single asset, but with any necessary apportionments of the reductions in chargeable gains, and in allowable losses, under subsections (2) and (3) above.

(5) If the disposal is of a right or interest in or over tangible movable property—

(a) in the first instance subsections (1), (2) and (3) above shall be applied in relation to the asset as a whole, taking the consideration as including the market value of what remains undisposed of, in addition to the actual consideration,

(b) where the sum of the actual consideration and that market value exceeds £6,000, the part of any chargeable gain that is excluded from it under subsection (2) above shall be so much of the gain as exceeds five-thirds of the difference between that sum and £6,000 multiplied by the fraction equal to the actual consideration divided by the said sum, and

(c) where that sum is less than £6,000 any loss shall be restricted under subsection (3) above by deeming the consideration to be the actual consideration plus the said fraction of the difference between the said sum and £6,000.

(6) This section shall not apply—

(a) in relation to a disposal of commodities of any description by a person dealing on a terminal market or dealing with or through a person ordinarily engaged in dealing on a terminal market, or

(b) in relation to a disposal of currency of any description.

Passenger vehicles.

263

A mechanically propelled road vehicle constructed or adapted for the carriage of passengers, except for a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used, shall not be a chargeable asset; and accordingly no chargeable gain or allowable loss shall accrue on its disposal.

Renewables obligation certificates for domestic microgeneration

263AZA

(1) A gain accruing to an individual on a disposal of a renewables obligation certificate is not a chargeable gain if—

(a) the individual acquired the certificate in connection with the generation of electricity by a microgeneration system,

(b) the system is installed at or near domestic premises occupied by the individual, and

(c) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.

(2) In subsection (1)—

“domestic premises” means premises used wholly or mainly as a separate private dwelling,

“microgeneration system” means any plant (including any equipment, apparatus or appliance) or system of plant for generating electricity or producing heat—which, in generating electricity or (as the case may be) producing heat, relies wholly or mainly on a source of energy or a technology mentioned in subsection (7) of section 82 of the Energy Act 2004, andwhose capacity to generate electricity or (as the case may be) to produce heat does not exceed the capacity mentioned in subsection (8) of that section,

“renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.

263ZA

(1) This section applies if—

(a) a deduction of the amount of one or more deductible payments may be made under section 555 of ITEPA 2003 (former employee entitled to deduction in calculating net income in respect of liabilities related to the former employment) in calculating a former employee's net income for a tax year, and

(b) the total amount which may be deducted exceeds the remaining total income for that year.

(2) In this section “excess relief” means the amount of the difference between—

(a) the total amount which may be deducted, and

(b) the remaining total income.

(2A) In this section “the remaining total income”, in relation to a tax year, means the former employee's total income for the tax year less reliefs already deducted for the tax year at Step 2 of the calculation in section 23 of ITA 2007 for the purpose of calculating the former employee's income tax liability.

(3) The amount of the excess relief may be treated as an allowable loss accruing to the former employee for that tax year.

This subsection applies only if the former employee makes a claim for the purpose.

(4) But no relief is available under subsection (3) in respect of any amount of the excess relief that exceeds the maximum amount.

(5) For the purposes of this section the “maximum amount”, in relation to the excess relief for a tax year, means the amount on which the former employee would be chargeable to capital gains tax for that year if the following were disregarded—

(a) any relief available under this section,

(b) any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 1(3),

(d) any relief under section 261B (deduction of trading losses), and

(e) any relief under section 261D (relief for post-cessation expenditure).

(6) A former employee may make a claim under subsection (3) and a claim under section 555(3) of ITEPA 2003 in the same notice.

Agreements for sale and repurchase of securities: capital gains tax

263A

(A1) For the purposes of this section there is a repo in respect of securities if—

(a) a person (“the original owner”) has agreed to sell the securities to another person (“the interim holder”), and

(b) the original owner or a person connected with the original owner—

(i) is required to buy back the securities by the agreement or a related agreement,

(ii) is required to buy back the securities as a result of the exercise of an option acquired under the agreement or a related agreement, or

(iii) exercises an option to buy back the securities which was acquired under the agreement or a related agreement.

(1) Subject to subsections (3) and (4) below, in any case where under a repo in respect of securities the original owner has transferred the securities to the interim holder—

(a) the acquisition of the securities in question by the interim holder and the disposal of those securities by him to the repurchaser, and

(b) except where the repurchaser is or may be different from the original owner, the disposal of those securities by the original owner and any acquisition of those securities by the original owner as the repurchaser,

shall be disregarded for the purposes of capital gains tax.

(1A) If, at any time after the acquisition mentioned in subsection (1)(a) above, it becomes apparent that the interim holder will not dispose of the securities to the repurchaser, the interim holder shall be treated for the purposes of capital gains tax as acquiring them at that time for a consideration equal to their market value at that time.

(1B) If, at any time after the disposal mentioned in subsection (1)(b) above, it becomes apparent that the original owner will not acquire the securities as the repurchaser, the original owner shall be treated for the purposes of capital gains tax as disposing of them at that time for a consideration equal to their market value at that time.

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

(3) Subsection (1) above does not apply if—

(a) the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or

(b) any of the benefits or risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrues to, or falls on, the interim holder.

(4) Subsection (1) above does not apply in relation to any disposal or acquisition of qualifying corporate bonds in a case where the securities disposed of by the original owner or those acquired by him, or by any other person, as the repurchaser are not such bonds.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) This section does not apply for the purposes of corporation tax in respect of chargeable gains.

Section 263A: interpretation

263AA

(1) Subsections (2) to (7) apply for the purposes of section 263A.

(2) References to buying back securities include references to—

(a) buying similar securities, and

(b) in the case of a person connected with the person who is the original owner under the repo, buying the securities sold by the original owner or similar securities.

(3) Subsection (2) applies even if the person buying the securities has not held them before.

(4) References to repurchase or a repurchaser are to be read accordingly.

(5) For the purposes of subsection (2) securities are similar if they give their holders—

(a) the same rights against the same persons as to capital and distributions, interest and dividends, and

(b) the same remedies to enforce those rights.

(6) Subsection (5) applies even if there is a difference in—

(a) the total nominal amounts of the securities,

(b) the form in which they are held, or

(7) Agreements are related if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).

(8) In section 263A and this section “securities” means—

(a) shares in a company wherever resident,

(b) loan stock or other securities of—

(i) the government of the United Kingdom,

(ii) a local authority in the United Kingdom,

(iii) another public authority in the United Kingdom,

(iv) a company resident in the United Kingdom or other body resident in the United Kingdom, or

(i) a government, local authority or other public authority of a territory outside the United Kingdom, or

(ii) another body of persons not resident in the United Kingdom.

Stock lending arrangements.

263B

(1) In this section “stock lending arrangement” means so much of any arrangements between two persons (“the borrower” and “the lender”) as are arrangements under which—

(a) the lender transfers securities to the borrower otherwise than by way of sale; and

(b) a requirement is imposed on the borrower to transfer those securities back to the lender otherwise than by way of sale.

(2) Subject to the following provisions of this section and sections 263C(2) and 263CA(3) and (5), the disposals and acquisitions made in pursuance of any stock lending arrangement shall be disregarded for the purposes of capital gains tax.

(3) Where—

(a) the borrower under any stock lending arrangement disposes of any securities transferred to him under the arrangement,

(b) that disposal is made otherwise than in the discharge of the requirement for the transfer of securities back to the lender, and

(c) that requirement, so far as it relates to the securities disposed of, has been or will be discharged by the transfer of securities other than those transferred to the borrower,

any question relating to the acquisition of the securities disposed of shall be determined (without prejudice to the provisions of Chapter I of Part IV) as if the securities disposed of were the securities with which that requirement (so far as relating to the securities disposed of) has been or will be discharged.

(4) Where, in the case of any stock lending arrangement, it becomes apparent, at any time after the making of the transfer by the lender, that the requirement for the borrower to make a transfer back to the lender will not be complied with—

(a) the lender shall be deemed for the purposes of this Act to have made a disposal at that time of the securities transferred to the borrower for a consideration equal to their market value at that time;

(b) the borrower shall be deemed to have acquired them at that time for that consideration; and

(c) subsection (3) above shall have effect in relation to any disposal before that time by the borrower of securities transferred to him by the lender as if the securities deemed to have been acquired by the borrower in accordance with paragraph (b) above were to be used for discharging a requirement to transfer securities back to the lender.

This subsection does not apply where section 263CA (insolvency of borrower) applies.

(5) References in this section, in relation to a person to whom securities are transferred, to the transfer of those securities back to another person shall be construed as if the cases where those securities are taken to be transferred back to that other person included any case where securities of the same description as those securities are transferred to that other person either—

(a) in accordance with a requirement to transfer securities of the same description; or

(b) in exercise of a power to substitute securities of the same description for the securities that are required to be transferred back.

(6) For the purposes of this section securities shall not be taken to be of the same description as other securities unless they are in the same quantities, give the same rights against the same persons and are of the same type and nominal value as the other securities.

(7) In this section “securities” has the meaning given by section 263AA.

Stock lending involving redemption.

263C

(1) In section 263B references to the transfer back to a person of securities transferred by him shall be taken to include references to the payment to him, in pursuance of an obligation arising on any person’s becoming entitled to receive an amount in respect of the redemption of those securities, of an amount equal to the amount of the entitlement.

(2) Where, in pursuance of any such obligation, the lender under any stock lending arrangement is paid any amount in respect of the redemption of any securities to which the arrangement relates—

(a) that lender shall be deemed for the purposes of this Act to have disposed, for that amount, of the securities in respect of whose redemption it is paid (“the relevant lent securities”);

(b) the borrower shall not, in respect of the redemption, be taken for the purposes of this Act to have made any disposal of the relevant lent securities; and

(c) section 263B(3) shall have effect in relation to disposals of any of the relevant lent securities made by the borrower before the redemption as if—

(i) the amount paid to the lender were an amount paid for the acquisition of securities, and

(ii) the securities acquired were to be used by the borrower for discharging a requirement under the arrangement to transfer the relevant lent securities back to the lender.

(3) Expressions used in this section and section 263B have the same meanings in this section as in that section.

Stock lending: insolvency etc of borrower

263CA

(1) This section applies where, in the case of any stock lending arrangement—

(a) the borrower (B) becomes insolvent after the lender (L) has transferred the securities,

(b) as a result of the insolvency, the requirement for B to make a transfer back to L will not be complied with as regards some or all of the securities,

(c) collateral is used (whether directly or indirectly) to enable L to acquire securities (“replacement securities”) of the same description as the securities which will not be transferred back, and

(d) the replacement securities are acquired before the end of the period of 30 days beginning with the day on which B becomes insolvent (“the insolvency date”).

(2) In accordance with section 263B(2), the transfer of the securities under the arrangement is not to be regarded as a disposal by L for the purposes of this Act (but this is subject to subsection (5)).

(3) B is to be treated for the purposes of this Act as having acquired the securities which will not be transferred back to L; and that acquisition is to be treated—

(a) as being made on the insolvency date, and

(b) as being for a consideration equal to their market value on that date.

(4) The acquisition of the replacement securities is to be treated, as regards L, as if it were a transfer back of securities in accordance with the arrangement (so that, in accordance with section 263B(2), that acquisition is not regarded as an acquisition by L for the purposes of this Act).

(5) If the number of replacement securities is less than the number of securities which B is treated as having acquired, L is to be treated for the purposes of this Act as having made a disposal, at the insolvency date, of the difference (“the deemed disposal”).

(6) The consideration for the deemed disposal is—

(a) where all the collateral is used to enable L to acquire replacement securities, nil, and

(b) where not all the collateral is so used, the difference between—

(i) the market value (at the insolvency date) of the number of securities which could have been acquired using the collateral, and

(ii) the market value (at that date) of the number of securities which were in fact so acquired.

(7) But if L at any time receives any amount (whether arising out of B's insolvency or otherwise) in respect of B's liability to L in respect of the securities which are treated under subsection (5) as having been disposed of by L that amount is to be treated as a chargeable gain accruing at that time to L.

(8) The liability mentioned in subsection (7) is not to be treated as giving rise to a relevant non-lending relationship for the purposes of Part 6 of CTA 2009 (relationships treated as loan relationships etc).

(9) For the purposes of this section, B becomes insolvent—

(a) if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,

(b) if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,

(c) on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,

(d) if an individual voluntary arrangement takes effect under Part 8 of that Act,

(e) on bankruptcy application made or the presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),

(f) if a compromise or arrangement takes effect under Part 26 or 26A of the Companies Act 2006,

(g) if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,

(h) if a bank administration order takes effect under Part 3 of that Act, or

(i) on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.

(10) In this section—

(a) “collateral” means an amount of money or other property which—

(i) is provided under the arrangement (or under arrangements of which the arrangement forms part), and

(ii) is payable to or made available for the benefit of L for the purpose of securing the discharge of the requirement to transfer any or all of the securities back to L, and

(b) any expression used in this section and in section 263B has the same meaning as in that section.

Gains accruing to persons paying manufactured dividends

263D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Structured finance arrangements

263E

(1) This section applies if—

(a) section 809BZB or 809BZC of ITA 2007 or section 759 or 760 of CTA 2010 (disregard of intended effects of arrangement involving disposals of assets) applies in relation to a structured finance arrangement,

(b) the borrower or a person connected with the borrower makes a disposal of any security at any time under the arrangement to or for the benefit of the lender or a person connected with the lender, and

(2) Condition A is that the person making the disposal (and no-one else) has the right or obligation under the arrangement to acquire the asset disposed of by that disposal at any subsequent time (whether or not the right or obligation is subject to any conditions).

(3) Condition B is that—

(a) the asset disposed of by that disposal will subsequently cease to exist at any time, and

(b) it is intended that that asset will be held by the lender, or a person connected with the lender, from the time of the disposal until that time.

(4) The disposal of the security by the borrower or a person connected with the borrower is to be disregarded for the purposes of this Act.

(4A) If, at any time after that disposal, it becomes apparent that—

(a) the person making the disposal will not subsequently acquire under the arrangement the asset disposed of by that disposal, or

(b) that asset will not be held as mentioned in subsection (3)(b),

that person is to be treated for the purposes of this Act as disposing of that asset at that time for a consideration equal to its market value at that time.

(5) Except in a case falling within subsection (4A), any subsequent acquisition by the person making the disposal of the asset disposed of by that disposal is to be disregarded for the purposes of this Act.

(6) In this section—

“the borrower”, in relation to a structured finance arrangement, means the person who is the borrower under the arrangement for the purposes of the defining section,

“the defining section” in relation to a structured finance arrangement— means section 809BZA of ITA 2007 if it is section 809BZB or 809BZC of ITA 2007 that applies in relation to the arrangement, andmeans section 758 of CTA 2010 if it is section 759 or 760 of CTA 2010 that applies in relation to the arrangement,

“the lender”, in relation to a structured finance arrangement, means the person who is the lender under the arrangement for the purposes of the defining section,

“security” means any such asset as is mentioned in subsection (2)(b) and (c) of the defining section.

(7) For the purposes of this section—

(a) references to a person connected with the borrower do not include the lender, and

(b) references to a person connected with the lender do not include the borrower.

Power to modify repo provisions: non-standard repo cases

263F

(1) The Treasury may by regulations provide for—

(a) section 261F (deemed manufactured payments: effect on repurchase price),

(b) section 261G (price differences under repos: effect on repurchase price),

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) any of those sections,

to apply with modifications in relation to non-standard repo cases.

(2) The power in subsection (1) to make provision for section 263A ... to apply with modifications is exercisable only so far as the section applies to any case mentioned in section 263A(1).

(3) A case is a non-standard repo case if—

(a) there is a repo in respect of securities,

(b) under the repo there has been a sale (“the original sale”) of the securities by the original owner to the interim holder, and

(4) Condition A is that—

(a) the obligation to buy back the securities is not performed, or

(b) the option to buy them back is not exercised.

(5) Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities.

(6) Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities.

(7) Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations.

(8) Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period—

(a) beginning immediately after the making of the agreement for the original sale, and

(b) ending when the repurchase price becomes due.

(9) “Post-agreement fluctuations” are fluctuations in the value of—

(a) securities transferred in pursuance of the original sale, or

(b) representative securities,

which occur in the period after the making of the agreement for the original sale.

(10) “Representative securities” are securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale.

Power to modify repo provisions: redemption arrangements

263G

(1) The Treasury may by regulations provide for—

(a) section 261F (deemed manufactured payments: effect on repurchase price),

(b) section 261G (price differences under repos: effect on repurchase price),

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or

(e) any of those sections,

to apply with modifications in relation to cases involving redemption arrangements.

(2) The power in subsection (1) to make provision for section 263A ... to apply with modifications is exercisable only so far as the section applies to any case mentioned in section 263A(1).

(3) A case involves redemption arrangements if—

(a) arrangements, corresponding to those made in cases where there is a repo, are made by an agreement, or one or more related agreements, in relation to securities that are to be redeemed in the period after their sale,

(b) the securities are UK shares, UK securities or overseas securities, and

(c) the arrangements are such that the seller or a person connected with the seller (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will result from the redemption.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sections 263F and 263G: supplementary provisions

263H

(1) Regulations under section 263F or 263G may make different provision for different cases.

(2) Regulations under either section may contain incidental, supplemental, consequential and transitional provision and savings.

(3) The incidental, supplemental and consequential provision may include—

(a) in the case of regulations about section 261G, modifications of section 261F, and

(b) in the case of regulations about section 263A ..., modifications of the operation of this Act in relation to cases where, by virtue of the regulations, any acquisition or disposal is excluded from those which are to be ignored for the purposes of capital gains tax.

(4) In this section and sections 263F and 263G “modifications” includes exceptions and omissions.

(5) Accordingly, a power in sections 263F and 263G to provide for a provision to apply with modifications in relation to a particular case includes power to provide for the provision not to apply in relation to that case.

Powers about manufactured overseas dividends

263I

(1) The Treasury may by regulations make provision as mentioned in subsection (2) about prescribed cases where a person—

(a) pays or receives an amount (a “manufactured overseas dividend”) which is representative of an overseas dividend on overseas securities where the payment or receipt is required to be made under an arrangement for the transfer of the securities, or

(b) is treated as doing so for any purposes of the Tax Acts.

(2) The regulations may provide for adjusting a relevant amount by reference to a provision which has effect under the law of a territory outside the United Kingdom.

(3) A “relevant amount” is an amount which is treated for prescribed capital gains tax purposes as the amount paid or payable to a person in respect of a relevant transaction.

(4) A “relevant transaction” is a sale, repurchase or other transfer of the overseas securities to which the manufactured overseas dividend relates.

(5) In this section “prescribed” means prescribed in regulations under this section.

(6) In this section—

(a) “overseas securities” means shares, stock or other securities issued by—

(i) a government, local authority or other public authority of a territory outside the United Kingdom, or

(ii) another body of persons not resident in the United Kingdom,

(b) “overseas securities” includes shares in a company which is not resident in the United Kingdom,

(c) “overseas dividend” means any interest, dividend or other annual payment payable in respect of overseas securities, and

(d) “securities” includes loan stock or any similar security.

Relief for local constituency associations of political parties on reorganisation of constituencies.

264

(1) In this section “relevant date” means the date of coming into operation of an Order in Council under the Parliamentary Constituencies Act 1986 (orders specifying new parliamentary constituencies) and, in relation to any relevant date—

(a) “former parliamentary constituency” means an area which, for the purposes of parliamentary elections, was a constituency immediately before that date but is no longer such a constituency after that date; and

(b) “new parliamentary constituency” means an area which, for the purposes of parliamentary elections, is a constituency immediately after that date but was not such a constituency before that date.

(2) In this section “local constituency association” means an unincorporated association (whether described as an association, a branch or otherwise) whose primary purpose is to further the aims of a political party in an area which at any time is or was the same or substantially the same as the area of a parliamentary constituency or 2 or more parliamentary constituencies and, in relation to any relevant date—

(a) “existing association” means a local constituency association whose area was the same, or substantially the same, as the area of a former parliamentary constituency or 2 or more such constituencies; and

(b) “new association” means a local constituency association whose area is the same, or substantially the same, as the area of a new parliamentary constituency or 2 or more such constituencies.

(3) For the purposes of this section, a new association is a successor to an existing association if any part of the existing association’s area is comprised in the new association’s area.

(4) In any case where, before, on or after a relevant date—

(a) an existing association disposes of land to a new association which is a successor to the existing association, or

(b) an existing association disposes of land to a body (whether corporate or unincorporated) which is an organ of the political party concerned and, as soon as practicable thereafter, that body disposes of the land to a new association which is a successor to the existing association,

the parties to the disposal or, where paragraph (b) above applies, to each of the disposals, shall be treated for the purposes of tax on chargeable gains as if the land disposed of were acquired from the existing association or the body making the disposal for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss accrued to that association or body.

(5) In a case falling within subsection (4) above, the new association shall be treated for the purposes of Schedule 2 as if the acquisition by the existing association of the land disposed of as mentioned in that subsection had been the new association’s acquisition of it.

(6) In any case where—

(a) before, on or after a relevant date, an existing association disposes of any land which was used and occupied by it for the purposes of its functions, and

(b) the existing association transfers the whole or part of the proceeds of the disposal to a new association which is a successor to the existing association,

then, subject to subsection (7) below, this Act (and, in particular, the provisions of sections 152 to 158) shall have effect as if, since the time it was acquired by the existing association, the land disposed of had been the property of the new association and, accordingly, as if the disposal of it had been by the new association.

(7) If, in a case falling within subsection (6) above, only part of the proceeds of the disposal is transferred to the new association, that subsection shall apply—

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