Taxation of Chargeable Gains Act 1992

• (a) as if there existed in the land disposed of as mentioned in paragraph (a) of that subsection a separate asset in the form of a corresponding undivided share in that land, and subject to any necessary apportionments of consideration for an acquisition or disposal of, or of an interest in, that land; and

• (b) as if the references in that subsection (other than paragraph (a) thereof) to the land disposed of and the disposal of it were references respectively to the corresponding undivided share referred to in paragraph (a) above and the disposal of that share;

and for this purpose a corresponding undivided share in the land disposed of is a share which bears to the whole of that land the same proportion as the part of the proceeds transferred bears to the whole of those proceeds.

• (8) In this section “political party” means a political party which qualifies for exemption under section 24 of the Inheritance Tax Act 1984 (gifts to political parties).

Designated international organisations.

265

• (1) Where—

• (a) the United Kingdom or any of the Communities is a member of an international organisation; and

• (b) the agreement under which it became a member provides for exemption from tax, in relation to the organisation, of the kind for which provision is made by this section;

the Treasury may by order designate that organisation for the purposes of this section.

• (2) The Treasury may by order designate any of the Communities or the European Investment Bank for the purposes of this section.

• (3) Where an organisation has been designated for the purposes of this section, then any security issued by the organisation shall be taken, for the purposes of this Act, to be situated outside the United Kingdom.

Inter-American Development Bank.

266

A security issued by the Inter-American Development Bank shall be taken for the purposes of this Act to be situated outside the United Kingdom.

Sharing of transmission facilities.

267

• (1) This section applies to any agreement relating to the sharing of transmission facilities—

• (a) to which the parties are national broadcasting companies,

• (b) which is entered into on or after 25th July 1991 (the day on which the Finance Act 1991 was passed) and before 1st January 1992 or such later date as may be specified for the purposes of this paragraph by the Secretary of State, and

• (c) in relation to which the Secretary of State has certified that it is expedient that this section should apply.

• (2) Where under an agreement to which this section applies one party to the agreement disposes of an asset to another party to the agreement, both parties shall be treated for the purposes of corporation tax on chargeable gains as if the asset acquired by the party to whom the disposal is made were acquired for a consideration of such amount as would secure that on the other’s disposal neither a gain nor a loss would accrue to that other.

• (3) Where under an agreement to which this section applies one party to the agreement disposes of an asset to another party to the agreement and the asset is one which the party making the disposal acquired on a part disposal by the party to whom the disposal under the agreement is made, then in applying subsection (2) above—

• (a) section 42 shall be deemed to have had effect in relation to the part disposal with the omission of subsection (4),

• (b) the amount or value of the consideration for the part disposal shall be taken to have been nil, and

• (c) if the disposal under the agreement is one to which section 35(2) applies, the market value of the asset on 31st March 1982 shall be taken to have been nil.

• (4) In this section “national broadcasting company” means a body corporate engaged in the broadcasting for general reception by means of wireless telegraphy of radio or television services or both on a national basis.

Decorations for valour or gallant conduct.

268

A gain shall not be a chargeable gain if accruing on the disposal by any person of a decoration awarded for valour or gallant conduct which he acquired otherwise than for consideration in money or money’s worth.

Victims of National-Socialist persecution

268A

• (1) A gain accruing on a disposal is not a chargeable gain if it accrues on—

• (a) a disposal of the right to receive the whole or any part of a qualifying payment in respect of National-Socialist persecution, or

• (b) a disposal of an interest in any such right.

• (2) A payment is a qualifying payment in respect of National-Socialist persecution if it is payable as mentioned in paragraphs (a) to (c) of section 756A(1) of ITTOIA 2005 (income tax exemption for payments to or in respect of victims of National-Socialist persecution).

• (3) In this section “interest”, in relation to any right, means an interest as a co-owner of the right.

• (4) It does not matter—

• (a) whether the right is owned jointly or in common, or

• (b) whether or not the interests of the co-owners are equal.

Compensation for deprivation of foreign assets

268B

• (1) A gain is not a chargeable gain if—

• (a) it accrues to a person on receipt of a capital sum paid by way of compensation for the deprivation of a foreign asset,

• (b) no legal redress was available when the deprivation occurred, and

• (c) the sum is paid as the result of a relevant compensation award.

• (2) A relevant compensation award is an award or distribution made—

• (a) under—

• (i) an Order in Council made under the Foreign Compensation Act 1950, or

• (ii) arrangements established by the government of a territory outside the United Kingdom that are equivalent in effect to such an Order,

• (b) as a result of a recommendation of—

• (i) the Spoliation Advisory Panel, or

• (ii) a body outside the United Kingdom whose purposes and functions are equivalent to those of the Panel, or

• (c) in settlement of a legal claim to the effect that the deprivation was unlawful or in accordance with an order to that effect made by a court, tribunal or other competent authority with jurisdiction to decide such a claim.

• (3) Reference in this section to the payment of a capital sum by way of compensation for the deprivation of a foreign asset includes—

• (a) payment as a result of the abandonment or extinguishment of rights in respect of the deprivation;

• (b) return of the asset itself.

• (4) In the case of a gain accruing to a person other than the original owner—

• (a) subsection (1) does not apply if consideration had been given at any time (whether by that person or someone else) for the right to receive the compensation, but

• (b) consideration given on an acquisition falling within section 58(1) or 171(1) is to be ignored for these purposes.

• (5) If the capital sum is paid (or the foreign asset returned) to a person to whom an allowable loss has accrued as a result of—

• (a) the deprivation of the foreign asset, or

• (b) the abandonment or extinguishment of rights in respect of the deprivation,

subsection (1) applies only to so much of any gain as exceeds that loss.

• (6) For a person to obtain relief under this section, the person must make a claim.

• (7) If the capital sum is paid by means of the transfer of an asset (or the foreign asset is returned), that asset is to be treated for the purposes of computing a gain or a loss on its subsequent disposal as if it were acquired for a consideration equal to its market value at the time of the transfer.

• (8) In this section—

• “capital sum” means money or money’s worth;

• “deprivation”, in relation to a foreign asset, includes deprivation resulting from—the seizure, confiscation, forfeiture, destruction or expropriation of the asset,the disposal of the asset by a sale under duress for less than market value;

• “foreign asset” means an asset which was situated outside the United Kingdom at the time of the deprivation;

• “legal redress”, in relation to the deprivation of a foreign asset, means a right to recover the asset or to receive compensation for the deprivation;

• “original owner” means the person who owned the foreign asset at the time of the deprivation;

• “Spoliation Advisory Panel” includes any successor to that Panel.

• (9) This section does not apply in relation to a gain to which section 268A applies.

Foreign currency for personal expenditure.

269

A gain shall not be a chargeable gain if accruing on the disposal by an individual of currency of any description acquired by him for the personal expenditure outside the United Kingdom of himself or his family or dependants (including expenditure on the provision or maintenance of any residence outside the United Kingdom).

Chevening Estate.

270

The enactments relating to capital gains tax (apart from this section) shall not apply in respect of property held on the trusts of the trust instrument set out in the Schedule to the Chevening Estate Act 1959.

Other miscellaneous exemptions.

271

• (1) The following gains shall not be chargeable gains—

• (a) gains accruing on the disposal of stock—

• (i) transferred, in pursuance of any Act of Parliament, to accounts in the books of the Bank of England in the name of the Treasury or the National Debt Commissioners;

• (ia) transferred, in pursuance of any Act of Parliament, to the Treasury or the National Debt Commissioners and in respect of which the Treasury or those Commissioners are entered as holder in the registers kept by the Registrar of Government Stock; or

• (ii) belonging to the Crown, in whatever name it may stand in the books of the Bank of England or in the registers kept by the Registrar of Government Stock;

• (b) any gain accruing to a person from his acquisition and disposal of assets held by him as part of the Fund mentioned in section 613(4) of the Taxes Act (House of Commons Members’ Fund);

• (c) any gain accruing to a person from his acquisition and disposal of assets held by him as part of a fund—

• (i) mentioned in section 614(2) of the Taxes Act,

• (ii) to which section 615(3) of the Taxes Act applies, or

• (iii) mentioned in section 648, 649, 650, 651 or 653 of ITEPA 2003;

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

• (e) any gain accruing on the disposal by the trustees of any settled property held on trusts in accordance with directions which are valid and effective under section 9 of the Superannuation and Trust Funds (Validation) Act 1927 (trust funds for the reduction of the National Debt);

• (ea) any gain accruing on the disposal by the trustees of an asbestos compensation settlement of any property comprised in the settlement;

• (f) any gain accruing to a consular officer or employee, within the meaning of section 771 of ITTOIA 2005, of any foreign state to which that section applies on the disposal of assets which at the time of the disposal were situated outside the United Kingdom;

• (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (1ZA) In subsection (1)(ea) above “asbestos compensation settlement” means a settlement—

• (a) the sole or main purpose of which is making compensation payments to or in respect of individuals who have, or had before their death, an asbestos-related condition, and

• (b) which is made before 24 March 2010 in pursuance of an arrangement within subsection (1ZB) below.

• (1ZB) An arrangement is within this subsection if it is—

• (a) a voluntary arrangement that has taken effect under Part 1 of the Insolvency Act 1986 or Part 2 of the Insolvency (Northern Ireland) Order 1989,

• (b) a compromise or arrangement that has taken effect under section 425 of the Companies Act 1985, Article 418 of the Companies (Northern Ireland) Order 1986 or Part 26 of the Companies Act 2006, or

• (c) an arrangement or compromise of a kind corresponding to any of those mentioned in paragraph (a) or (b) above that has taken effect under, or as a result of, the law of a country or territory outside the United Kingdom.

• (1A) A gain accruing to a person on a disposal of investments held for the purposes of a registered pension scheme or an overseas pension scheme is not a chargeable gain.

• (1B) But subsection (1A) does not prevent such a gain from being treated as a chargeable gain for the purposes of sections 185F to 185I of the Finance Act 2004 (scheme chargeable payments: gains from taxable property).

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

• (3) A local authority, a local authority association and a health service body shall be exempt from capital gains tax.

In this subsection—

• “health service body” has the meaning given by section 986 of CTA 2010, and

• “local authority association” has the meaning given by section 1000 of ITA 2007.

• (4) Any interest to which section 702 of ITTOIA 2005 (certified SAYE savings arrangements) applies shall be disregarded for all purposes of the enactments relating to capital gains tax.

In any case where there is a transfer to which section 216 applies, this subsection shall have effect in relation to any interest payable after the transfer under a savings arrangement which immediately before the transfer was a certified SAYE savings arrangement notwithstanding that it ceased to be such a arrangement by reason of the transfer.

In this subsection “certified SAYE savings arrangement” has the meaning given by section 703 of ITTOIA 2005.

• (5) A signatory to the Operating Agreement made pursuant to the Convention on the International Maritime Satellite Organisation which came into force on 16th July 1979, other than a signatory designated for the purposes of the Agreement by the United Kingdom in accordance with the Convention, shall be exempt from capital gains tax in respect of any payment received by that signatory from the Organisation in accordance with the Agreement.

• (6) The following shall, on a claim made in that behalf to the Board, be exempt from tax in respect of all chargeable gains—

• (a) the Trustees of the British Museum and the Trustees of the Natural History Museum; and

• (b) an association (in the sense that word has in section 469(1)(a) of CTA 2010) which meets conditions A and B in that section (conditions for qualifying as a scientific research association).

• (7) The Historic Buildings and Monuments Commission for England and, the Trustees of the National Heritage Memorial Fund ... ... ... shall be exempt from tax in respect of chargeable gains ...

• (7A) Chargeable gains are exempt from tax if they accrue to a bank, or issue department of a bank, to which this subsection applies for the time being.

• (7B) Her Majesty may by Order in Council direct that subsection (7A) applies to a bank or its issue department if it appears to Her Majesty that the bank—

• (a) is not resident in the United Kingdom, and

• (b) is entrusted by the government of a territory outside the United Kingdom with the custody of the territory's principal foreign exchange reserves.

• (7C) No recommendation may be made to Her Majesty in Council to make an order under subsection (7B) unless a draft of the order has been laid before and approved by a resolution of the House of Commons.

• (8) There shall be exempt from tax any chargeable gains accruing to the issue department of the Reserve Bank of India constituted under an Act of the Indian legislature called the Reserve Bank of India Act 1934, or to the issue department of the State Bank of Pakistan constituted under certain orders made under section 9 of the Indian Independence Act 1947.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (10) In subsection (1A) above—

• “investments” includes futures contracts and options contracts;

• “overseas pension scheme” has the same meaning as in Part 4 of the Finance Act 2004 (see section 150(7) of that Act).

• (11) For the purposes of subsection (10) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.

• (12) Subsections (1)(b) and (c) and (1A) above do not apply to gains accruing to a person from the acquisition and disposal by him of assets held as a member of a property investment LLP.

Visiting forces and official agents etc

Visiting forces and staff of designated allied headquarters

271ZA

• (1) This section applies for the purposes of capital gains tax if section 833 of ITA 2007 (visiting forces and staff of designated allied headquarters) applies to an individual throughout a period.

• (2) The period is not a period of residence in the United Kingdom.

• (3) The period does not create a change of the individual's residence or domicile.

Official agents of Commonwealth countries or Republic of Ireland etc

271ZB

• (1) An individual who is entitled to immunity from income tax as a result of section 841 of ITA 2007 (official agents of Commonwealth countries or Republic of Ireland etc) is entitled to the same immunity from capital gains tax as that to which a member of the staff of a mission is entitled under the Diplomatic Privileges Act 1964.

• (2) The reference here to a member of the staff of a mission is to be read in accordance with the Diplomatic Privileges Act 1964.

Part 7A — UK representatives of non-UK residents

Chapter 1 — Treatment of branch or agency as UK representative of non-UK resident

Introduction

Overview of Chapter

271A

• (1) This Chapter provides for a branch or agency to be treated as the UK representative of a non-UK resident in respect of certain amounts chargeable to capital gains tax.

• (2) For obligations and liabilities in relation to capital gains tax imposed on a branch or agency which under this Chapter is treated as the UK representative of a non-UK resident, see Chapter 2.

Branches and agencies

Branch or agency treated as UK representative

271B

• (1) This section applies if—

• (a) a non-UK resident carries on (alone or in partnership) any trade, profession or vocation through a branch or agency in the United Kingdom, and

• (b) the branch or agency is to be treated under Chapter 2B of Part 14 of ITA 2007 as the UK representative of the non-UK resident in relation to amounts within section 835E(2) of that Act.

• (2) The branch or agency is the UK representative of the non-UK resident in relation to amounts which, by reference to the branch or agency, are chargeable to capital gains tax as a result of section 1A(3)(a) above.

• (3) The following rules are to be applied for the purposes of subsection (2) and Chapter 2 in relation to an amount within that subsection.

• Rule 1 The UK representative continues to be the UK representative of the non-UK resident in relation to the amount even after ceasing to be a branch or agency through which the non-UK resident carries on the trade, profession or vocation concerned.

• Rule 2 The UK representative is treated in relation to the amount as a distinct and separate person from the non-UK resident (if the representative would not otherwise be so treated).

• Rule 3 If the branch or agency is carried on by persons in partnership, the partnership, as such, is treated in relation to the amount as the UK representative of the non-UK resident.

• (4) For further rules that apply where a trade or profession carried on by a non-UK resident in the United Kingdom is carried on in partnership, see section 271C.

Trade or profession carried on in partnership

271C

• (1) Subsection (2) applies if a trade or profession carried on by a non-UK resident through a branch or agency in the United Kingdom is carried on by the non-UK resident in partnership.

• (2) The trade or profession carried on through the branch or agency is, for the purposes of section 271B and Chapter 2, to be treated as including the notional trade or profession.

• (3) Subsection (4) applies (in addition to subsection (2) if that subsection also applies) if—

• (a) a trade or profession carried on by a non-UK resident in the United Kingdom is carried on by the non-UK resident in partnership, and

• (b) any member of the partnership is resident in the United Kingdom.

• (4) The notional trade or profession is, for the purposes of section 271B and Chapter 2, to be treated as being a trade carried on in the United Kingdom through the partnership as such.

• (5) In this section “the notional trade or profession” means the notional trade from which the non-UK resident's share in the partnership's profits or losses is treated for the purposes of section 852 of ITTOIA 2005 as deriving.

Interpretation of Chapter

271D

In this Chapter—

• “branch or agency” means any factorship, agency, receivership, branch or management, and

• “non-UK resident” means a person who is not resident in the United Kingdom.

Chapter 2 — Capital gains tax obligations and liabilities imposed on UK representatives

Introduction to Chapter

271E

• (1) This Chapter applies to the enactments contained in—

• (a) this Act,

• (b) the Tax Acts, and

• (c) subordinate legislation made under this Act or the Tax Acts,

so far as they make provision for or in connection with the assessment, collection and recovery of tax, or of interest on tax.

• (2) Those enactments have effect in accordance with section 271F in relation to amounts in respect of which a branch or agency is to be treated as the UK representative of a non-UK resident under Chapter 1.

• (3) In this section “subordinate legislation” has the same meaning as in the Interpretation Act 1978.

Obligations and liabilities of UK representative

271F

• (1) The obligations and liabilities of a non-UK resident are to be treated, for the purposes of the enactments to which this Chapter applies, as if they were also the obligations and liabilities of the UK representative of the non-UK resident.

• (2) Subsection (3) applies if—

• (a) the UK representative of a non-UK resident discharges an obligation or liability imposed by this section that corresponds to one to which the non-UK resident is subject, or

• (b) a non-UK resident discharges an obligation or liability that corresponds to one to which the non-UK resident's UK representative is subject by virtue of this section.

• (3) The corresponding obligation or liability—

• (a) of the non-UK resident (in a case within subsection (2)(a)), or

• (b) of the UK representative (in a case within subsection (2)(b)),

is discharged.

• (4) A non-UK resident is bound, as if they were the non-UK resident's own, by acts or omissions of the non-UK resident's UK representative in the discharge of the obligations and liabilities imposed on the representative by this section.

• (5) This section is subject to sections 271G and 271H.

Exceptions: notices and information

271G

• (1) An obligation or liability attaching to a non-UK resident (“X”) by reason of a notice or other document having been given or served on X does not also attach to the UK representative of X by virtue of section 271F unless the notice or other document (or a copy of it) has been given to or served on the representative.

• (2) An obligation or liability attaching to X by reason of a request or demand having been received by X does not also attach to the UK representative of X by virtue of section 271F unless the representative has been notified of the request or demand.

• (3) Subsection (4) applies to obligations relating to the provision of information that are imposed on the UK representative of X by section 271F in a case where the representative is X's independent agent.

• (4) The obligations do not require the UK representative to do anything except so far as it is practicable for the representative to do so.

• (5) For this purpose, the representative must act to the best of the representative's knowledge and belief after taking all reasonable steps to obtain the necessary information.

• (6) An obligation of X to provide information is not discharged by virtue of section 271F in a case where the UK representative of X has discharged the obligation only so far as required by subsection (4) of this section.

• (7) X is not bound by virtue of section 271F by mistakes in information provided by the UK representative of X in discharging, so far as required under subsection (4) of this section, an obligation imposed on the representative by section 271F unless—

• (a) the mistake is the result of an act or omission of X, or

• (b) the mistake is one to which X consented or in which X connived.

• (8) In this section “information” includes anything contained in a return, self-assessment, account, statement or report required to be provided to the Commissioners for Her Majesty's Revenue and Customs or to any officer of Revenue and Customs.

Exceptions: criminal offences and penalties etc

271H

• (1) A person is not by virtue of section 271F liable to be proceeded against for a criminal offence unless the person—

• (a) committed the offence, or

• (b) consented to or connived in its commission.

• (2) An independent agent of a non-UK resident is not by virtue of section 271F liable to any civil penalty or surcharge in respect of an act or omission if conditions A and B are met.

• (3) Condition A is that the act or omission is not—

• (a) an act or omission of the independent agent, or

• (b) an act or omission to which the agent consented or in which the agent connived.

• (4) Condition B is that the independent agent is able to show that the amount of the penalty or surcharge will not be recoverable out of the sums mentioned in section 271I(3) (after being indemnified for any other liabilities under section 271I).

Indemnities

271I

• (1) An independent agent of a non-UK resident is entitled to be indemnified for the amount of any liability of the non-UK resident which the agent has discharged by virtue of section 271F.

• (2) An independent agent of a non-UK resident is entitled to retain, from the sums mentioned in subsection (3), amounts sufficient to meet any liabilities which by virtue of section 271F the agent has discharged or to which the agent is subject.

• (3) The sums are those which—

• (a) (ignoring subsection (2)) are due from the independent agent to the non-UK resident, or

• (b) are received by the independent agent on behalf of the non-UK resident.

Meaning of “non-UK resident” and “independent agent”

271J

• (1) In this Chapter “non-UK resident” means a person who is not resident in the United Kingdom.

• (2) In this Chapter “independent agent”, in relation to a non-UK resident (“X”), means a person who is the UK representative of X in respect of any agency in which the person is acting on behalf of X in an independent capacity.

• (3) For this purpose a person does not act in an independent capacity on behalf of X unless the relationship between them, having regard to its legal, financial and commercial characteristics, is a relationship between persons carrying on independent businesses dealing with each other at arm's length.

Part VIII — Supplemental

Valuation: general.

272

• (1) In this Act “market value” in relation to any assets means the price which those assets might reasonably be expected to fetch on a sale in the open market.

• (2) In estimating the market value of any assets no reduction shall be made in the estimate on account of the estimate being made on the assumption that the whole of the assets is to be placed on the market at one and the same time.

• (3) The Treasury may make regulations as to the manner for determining for the purposes of this Act—

• (a) the market value at any time of shares or securities which are included in the official UK list, and

• (b) the market value at any time of shares or securities which are listed on a recognised stock exchange outside the United Kingdom.

• (4) The regulations may—

• (a) make different provision for different cases, and

• (b) contain incidental, supplemental, consequential and transitional provision and savings.

• (5) In this Act “market value” in relation to any rights of unit holders in any unit trust scheme the buying and selling prices of which are published regularly by the managers of the scheme shall mean an amount equal to the buying price (that is the lower price) so published on the relevant date, or if none were published on that date, on the latest date before.

• (6) The provisions of this section, with sections 273 and 274, have effect subject to sections 25A and 41A and Part I of Schedule 11.

Unquoted shares and securities.

273

• (1) The provisions of subsection (3) below shall have effect in any case where, in relation to an asset to which this section applies, there falls to be determined by virtue of section 272(1) the price which the asset might reasonably be expected to fetch on a sale in the open market.

• (2) The assets to which this section applies are shares and securities which are not listed on a recognised stock exchange at the time as at which their market value for the purposes of tax on chargeable gains falls to be determined.

• (3) For the purposes of a determination falling within subsection (1) above, it shall be assumed that, in the open market which is postulated for the purposes of that determination, there is available to any prospective purchaser of the asset in question all the information which a prudent prospective purchaser of the asset might reasonably require if he were proposing to purchase it from a willing vendor by private treaty and at arm’s length.

Value determined for inheritance tax.

274

Where on the death of any person inheritance tax is chargeable on the value of his estate immediately before his death and the value of an asset forming part of that estate has been ascertained (whether in any proceedings or otherwise) for the purposes of the application of that tax to the estate, the value so ascertained shall be taken for the purposes of this Act to be the market value of that asset at the date of the death.

Location of assets.

275

• (1) For the purposes of this Act—

• (a) the situation of rights or interests (otherwise than by way of security) in or over immovable property is that of the immovable property,

• (b) subject to the following provisions of this subsection, the situation of rights or interests (otherwise than by way of security) in or over tangible movable property is that of the tangible movable property,

• (c) subject to the following provisions of this subsection, a debt, secured or unsecured, is situated in the United Kingdom if and only if the creditor is resident in the United Kingdom,

• (d) shares or debentures issued by any municipal or governmental authority, or by any body created by such an authority, are situated in the country of that authority,

• (da) subject to paragraph (d) above, shares in or debentures of a company incorporated in any part of the United Kingdom are situated in the United Kingdom,

• (e) subject to paragraphs (d) and (da) above, registered shares or debentures are situated where they are registered and, if registered in more than one register, where the principal register is situated,

• (f) a ship or aircraft is situated in the United Kingdom if and only if the owner is then resident in the United Kingdom, and an interest or right in or over a ship or aircraft is situated in the United Kingdom if and only if the person entitled to the interest or right is resident in the United Kingdom,

• (g) the situation of good-will as a trade, business or professional asset is at the place where the trade, business or profession is carried on,

• (h) patents, trade marks, registered designs and corresponding rights are situated where they are registered, and if registered in more than one register, where each register is situated, and licences or other rights in respect of any such rights are situated in the United Kingdom if they or any right derived from them are exercisable in the United Kingdom,

• (j) copyright, design right, franchises and corresponding rights, and licences or other rights in respect of any such rights, are situated in the United Kingdom if they or any right derived from them are exercisable in the United Kingdom,

• (k) a judgment debt is situated where the judgment is recorded,

• (l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In subsection (1) above—

• (a) in paragraphs (d), (da) and (e), the references to shares or debentures, in relation to a company that has no share capital, include any interests in the company possessed by members of the company, and

• (b) in paragraphs (d) and (e), the references to debentures, in relation to a person other than a company, include securities.

• (3) In subsection (1) above, in each of paragraphs (h) and (j), “corresponding rights” means any rights under the law of a country or territory outside the United Kingdom that correspond or are similar to those within that paragraph.

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Subsection (1) above is subject to—

• section 265(3) (securities issued by designated international organisations to be taken to be situated outside UK),

• section 266 (securities issued by Inter-American Development Bank to be taken to be situated outside UK), and

• section 275C (location of assets: interests of co-owners).

Location of certain intangible assets

275A

• (1) This section applies for the purpose of determining whether the situation of an intangible asset (“asset A”) is in the United Kingdom if the situation of asset A is not otherwise determined (see section 275B(1)).

• (2) In this section “intangible asset” means—

• (a) intangible or incorporeal property and includes a thing in action, or

• (b) anything that under the law of a country or territory outside the United Kingdom corresponds or is similar to intangible or incorporeal property or a thing in action.

• (3) If asset A is subject to UK law (see section 275B(2)) at the time it is created, it shall be taken for the purposes of this Act to be situated in the United Kingdom at all times.

• (4) Subsections (5) to (9) below have effect if asset A—

• (a) is a future or option (see section 275B(3)), and

• (b) is not subject to UK law at the time it is created.

• (5) If, as a result of the application of the rule in subsection (6) below in relation to asset A or any other asset or assets, asset A falls to be treated as being subject to UK law at the time it is created, it shall be taken for the purposes of this Act to be situated in the United Kingdom at all times.

• (6) That rule is that where, in the case of any intangible asset,—

• (a) the asset is a future or option,

• (b) the underlying subject matter (see section 275B(4)) of the asset consists of or includes an asset which is an intangible asset, and

• (c) either—

• (i) that intangible asset is subject to UK law at the time it is created and, on the assumption that there were no rights or interests in or over that asset, the situation of that asset would not be otherwise determined, or

• (ii) that intangible asset is treated by this subsection as being so subject at that time,

the intangible asset mentioned in paragraph (a) above is to be treated for the purposes of subsection (5) above and this subsection as being so subject at the time it is created.

• (7) If—

• (a) asset A is not taken to be situated in the United Kingdom by virtue of subsection (5) above, and

• (b) as a result of the application of the rule in subsection (8) below in relation to asset A or any other asset or assets, asset A falls to be treated as being situated in the United Kingdom at any time,

it shall be taken for the purposes of this Act to be situated in the United Kingdom at that time.

• (8) That rule is that where, in the case of any intangible asset,—

• (a) the asset is a future or option, and

• (b) the underlying subject matter of the asset consists of or includes an asset—

• (i) which is, by virtue of subsection (9) below or of any provision of this Act apart from this section, situated in the United Kingdom at any time, or

• (ii) which is treated by this subsection as being so situated at any time,

the intangible asset mentioned in paragraph (a) above is to be treated for the purposes of subsection (7) above and this subsection as being so situated at that time.

• (9) Where—

• (a) the underlying subject matter of a future or option consists of or includes shares or debentures issued by a company incorporated in any part of the United Kingdom, but

• (b) at the time the future or option is created, those shares or debentures have not been issued,

the underlying subject matter of the future or option, so far as consisting of or including those shares or debentures, is to be taken, for the purposes of subsection (8) above, to consist of or include an asset which is situated in the United Kingdom at all times.

Section 275A: supplementary provisions

275B

• (1) For the purposes of section 275A, the situation of an asset is not otherwise determined if, apart from that section, this Act does not make any provision for determining—

• (a) the situation of the asset, or

• (b) whether the situation of the asset is in the United Kingdom.

• (2) For the purposes of section 275A, an intangible asset is subject to UK law at a particular time if any right or interest which comprises or forms part of the asset is, at that time,—

• (a) governed by, or otherwise subject to, or

• (b) enforceable under,

the law of any part of the United Kingdom.

• (3) In section 275A—

• “future” has the meaning given by section 581 of CTA 2009, and

• “option” has the meaning given by section 580 of that Act.

• (4) For the purposes of section 275A—

• (a) the underlying subject matter of a future is the property which, if the future were to run to delivery, would fall to be delivered at the date and price agreed when the contract is made, and

• (b) the underlying subject matter of an option is the property which would fall to be delivered if the option were exercised.

• (5) Section 275A is subject to section 275C (location of assets: interests of co-owners).

• (6) This section is to be construed as one with section 275A.

Location of assets: interests of co-owners

275C

• (1) This section applies for determining for the purposes of this Act—

• (a) the situation of an interest (see subsection (4)) in an asset, or

• (b) whether the situation of an interest in an asset is in the United Kingdom.

• (2) The situation of the interest in the asset shall be taken to be the same as the situation of the asset, as determined in accordance with subsection (3) below.

• (3) The situation of the asset for the purposes of subsection (2) above shall be determined on the assumption that the asset is wholly-owned by the person holding the interest in the asset.

• (4) In this section “interest”, in relation to an asset, means an interest as a co-owner of the asset (whether the asset is owned jointly or in common and whether or not the interests of the co-owners are equal).

The territorial sea and the continental shelf.

276

• (1) The territorial sea of the United Kingdom shall for all purposes of the taxation of chargeable gains (including the following provisions of this section) be deemed to be part of the United Kingdom.

• (2) In this section—

• (a) “exploration or exploitation activities” means activities carried on in connection with the exploration or exploitation of so much of the seabed and subsoil and their natural resources as is situated in the United Kingdom or a designated area; and

• (b) “exploration or exploitation rights” means rights to assets to be produced by exploration or exploitation activities or to interests in or to the benefit of such assets; and

• (c) references to the disposal of exploration or exploitation rights include references to the disposal of shares deriving their value or the greater part of their value directly or indirectly from such rights, other than shares listed on a recognised stock exchange; and

• (d) “shares” includes stock and any security as defined in section 1117(1) of CTA 2010; and

• (e) “designated area” means an area designated by Order in Council under section 1(7) of the Continental Shelf Act 1964.

• (3) Any gains accruing on the disposal of exploration or exploitation rights shall be treated for the purposes of this Act as gains accruing on the disposal of assets situated in the United Kingdom.

• (4) Gains accruing on the disposal of—

• (a) exploration or exploitation assets which are situated in a designated area, or

• (b) unquoted shares deriving their value or the greater part of their value directly or indirectly from exploration or exploitation assets situated in the United Kingdom or a designated area or from such assets and exploration or exploitation rights taken together,

shall be treated for the purposes of this Act as gains accruing on the disposal of assets situated in the United Kingdom.

• (5) For the purposes of this section, an asset disposed of is an exploration or exploitation asset if either—

• (a) it is not a mobile asset and it is being or has at some time been used in connection with exploration or exploitation activities carried on in the United Kingdom or a designated area; or

• (b) it is a mobile asset which has at some time been used in connection with exploration or exploitation activities so carried on and is dedicated to an oil field in which the person making the disposal, or a person connected with him, is or has been a participator;

and expressions used in paragraphs (a) and (b) above have the same meaning as if those paragraphs were included in Part I of the Oil Taxation Act 1975.

• (6) In subsection (4)(b) above “unquoted shares” means shares other than those which are listed on a recognised stock exchange; and references in subsections (7) and (8) below to exploration or exploitation assets include references to unquoted shares falling within subsection (4)(b).

• (7) Gains accruing to a person not resident in the United Kingdom on the disposal of exploration or exploitation rights or of exploration or exploitation assets shall, for the purposes of capital gains tax or corporation tax on chargeable gains, be treated as gains accruing on the disposal of assets used for the purposes of a trade carried on by that person in the United Kingdom through a branch or agency.

• (8) The provisions specified in subsection (9) below shall apply in relation to a disposal of exploration or exploitation rights or exploration or exploitation assets if (and only if) the disposal is—

• (a) by a company resident in a territory outside the United Kingdom to a company resident in the same territory,

• (b) by a company resident in the United Kingdom to another company which is so resident, or

• (c) by a company which is not resident in the United Kingdom to another company which is resident there.

• (9) Those provisions are—

• (a) section 41(8),

• (b) section 171 (except subsections (1)(b) and (1A)),

• (c) section 173 (with the omission of the words “to which this section applies" in subsections (1)(a) and (2)(a) and “such" in subsections (1)(c) and (2)(c) and with the omission of subsection (3)),

• (d) section 174(4) (with the substitution of “at a time when both were members of the group" for “in a transfer to which section 171(1) applied”),

• (e) section 179 (except subsections (1)(b) and (1A)), and

• (f) section 181.

• (10) The provisions specified in subsection (9) above shall apply in accordance with subsection (8) above with the following modifications—

• (a) for the purposes of paragraph (a) of subsection (9) above, section 41(8) applies as if section 170 applied, for the purposes of section 171, with the omission of subsection (9), and

• (b) for the purposes of paragraphs (b) to (f) of subsection (9) above, the provisions specified in those paragraphs apply as if in section 170 subsection (9) were omitted.

No gain/no loss: foreign permanent establishment exemption

276A

• (1) On a no gain/no loss disposal by a company in relation to which an election under section 18A of CTA 2009 (exemption for profits or losses of foreign permanent establishments) has effect, the amount of the consideration which would secure that neither a gain nor a loss would accrue to the company on the disposal is to be arrived at after taking account of the operation of the provisions of Chapter 3A of Part 2 of that Act (with the result that that amount includes the amount which for the purposes of that Chapter would in the case of the company be the foreign permanent establishments amount attributable to the disposal for the accounting period in which it was made if the disposal were not a no gain/no loss disposal).

• (2) For the purposes of this section a no gain/no loss disposal is one on which by virtue of section 152 or any of the no gain/no loss provisions neither a gain nor a loss accrues to the company making the disposal.

Double taxation relief.

277

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

Allowance for foreign tax.

278

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

Foreign assets: delayed remittances.

279

• (1) Subsection (2) below applies where—

• (a) chargeable gains accrue from the disposal of assets situated outside the United Kingdom, and

• (b) the person charged or chargeable makes a claim, and

• (c) the conditions set out in subsection (3) below are, so far as applicable, satisfied as respects those gains (“the qualifying gains”);

and subsection (2)(b) also applies where a claim has been made under section 13 of the 1979 Act.

• (2) For the purposes of capital gains tax—

• (a) the amount of the qualifying gains shall be deducted ... from the amounts on which the claimant is assessed to capital gains tax for the year in which the qualifying gains accrued to the claimant, but

• (b) the amount so deducted shall be assessed to capital gains tax on the claimant (or his personal representatives) as if it were an amount of chargeable gains accruing in the year of assessment in which the conditions set out in subsection (3) below cease to be satisfied.

• (3) The conditions are—

• (a) that the claimant was unable to transfer the qualifying gains to the United Kingdom, and

• (b) that that inability was due to the laws of the territory where the assets were situated at the time of the disposal, or to the executive action of its government, or to the impossibility of obtaining foreign currency in that territory, and

• (c) that the inability was not due to any want of reasonable endeavours on the part of the claimant.

• (4) Where under an agreement entered into under arrangements made by the Secretary of State in pursuance of section 1 of the Overseas Investment and Export Guarantees Act 1972 or section 11 of the Export Guarantees and Overseas Investment Act 1978 any payment is made by the Exports Credits Guarantee Department in respect of any gains which cannot be transferred to the United Kingdom, then, to the extent of the payment, the gains shall be treated as gains with respect to which the conditions mentioned in subsection (3) above are not satisfied (and accordingly cannot cease to be satisfied).

• (5) No claim under this section in respect of a chargeable gain shall be made—

• (a) in the case of a claim for the purposes of capital gains tax, more than 4 years after the end of the year of assessment in which the gain accrues; or

• (b) in the case of a claim for the purposes of corporation tax, more than 4 years after the end of the accounting period in which the gain accrues.

• (6) The personal representatives of a deceased person may make any claim which he might have made under this section if he had not died.

• (7) Where—

• (a) a claim under this section is made (or has been made under section 13 of the 1979 Act) by a man in respect of chargeable gains accruing to his wife before 6th April 1990, and

• (b) by virtue of this section the amount of the gains falls to be assessed to capital gains tax as if it were an amount of gains accruing in the year 1992-93 or a subsequent year of assessment,

it shall be assessed not on the claimant (or his personal representatives) but on the person to whom the gains accrued (or her personal representatives).

• (8) In relation to disposals before 19th March 1991 subsection (3)(b) above shall have effect with the substitution of the words “income arose" for the words “ assets were situated at the time of the disposal ”.

Deferred unascertainable consideration: election for treatment of loss

279A

• (1) Where—

• (a) a person (“the taxpayer”) makes a disposal of a right to which this section applies (see subsection (2) below),

• (b) on that disposal an allowable loss (“the relevant loss”) would, apart from section 279C, accrue to him in any year (“the year of the loss”), and

• (c) the year of the loss is a year in which the taxpayer is within the charge to capital gains tax (see section 279B(1)),

the taxpayer may make an election under this section for the relevant loss to be treated as accruing in an earlier year in accordance with section 279C if condition 1 in subsection (3) below and condition 2 in subsection (5) below are satisfied.

• (2) This section applies to a right if each of the following conditions is satisfied—

• (a) the right was, in whole or in part, acquired by the taxpayer as the whole or part of the consideration for a disposal (the “original disposal”) by him of another asset (the “original asset”),

• (b) the original disposal was made in a year (“the year of the original disposal”) earlier than the year in which the disposal mentioned in subsection (1)(a) above is made (“the year of the right’s disposal”),

• (c) where the right was acquired by the taxpayer as the whole or part of the consideration for two or more disposals (each of which is accordingly an “original disposal”), the condition in paragraph (b) above is satisfied with respect to each of those disposals (the “original disposals”),

• (d) on the taxpayer’s acquisition of the right, there was no corresponding disposal of it,

• (e) the right is a right to unascertainable consideration (see section 279B(2) to (6)).

• (3) Condition 1 for making an election in relation to the relevant loss is that a chargeable gain accrued to the taxpayer on any one or more of the following events—

• (a) the original disposal,

• (b) an earlier disposal of the original asset by the taxpayer in the year of the original disposal,

• (c) a later disposal of the original asset by the taxpayer in a year earlier than the year of the right’s disposal,

or would have so accrued but for paragraph 2(2)(a) of Schedule 5B or 5C (postponement of original gain). This subsection is subject to subsection (4) below.

• (4) If the right to which this section applies was acquired by the taxpayer as the whole or part of the consideration for two or more original disposals (including cases where there are two or more original assets (the “original assets”))—

• (a) any reference in subsection (3) above to the original disposal is a reference to any of the original disposals,

• (b) any reference in that subsection to the original asset is a reference to the asset which is the original asset in relation to that original disposal, and

• (c) any reference in that subsection to the year of the original disposal shall be construed accordingly.

• (5) Condition 2 for making an election in relation to the relevant loss is that there is a year (an “eligible year”)—

• (a) which is earlier than the year of the loss but not earlier than the year 1992-93,

• (b) in which a chargeable gain falling within subsection (3) above or subsection (6) below accrued to the taxpayer, and

• (c) for which, immediately before the election, there remains a relevant amount on which capital gains tax is chargeable (see subsection (7) below).

• (6) A chargeable gain falling within this subsection accrues to the taxpayer in a year if—

• (a) in that year a chargeable gain (the “revived gain”) is treated as accruing to the taxpayer in accordance with paragraphs 4 and 5 of Schedule 5B or 5C (chargeable gain accruing to person on chargeable event), and

• (b) the gain which, in determining the amount of the revived gain in accordance with those paragraphs, is the original gain consists of or represents the whole or some part of a gain that would have accrued as mentioned in subsection (3) above but for paragraph 2(2)(a) of Schedule 5B or 5C.

• (7) For the purposes of subsection (5)(c) above, a year is one for which, immediately before an election, there remains a relevant amount on which capital gains tax is chargeable if, immediately before the making of that election, there remains an amount in respect of which the taxpayer is chargeable to capital gains tax for the year—

• (a) after taking account of any previous elections made by the taxpayer under this section,

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) on the assumption that no part of the relevant loss (or of any other loss in respect of which an election under this section may be, but has not been, made) falls to be deducted in consequence of an election under this section from the chargeable gains accruing to the taxpayer in that year.

• (8) In this section “year” means year of assessment.

• (9) This section and sections 279B to 279D are to be construed as one.

Provisions supplementary to section 279A

279B

• (1) For the purposes of section 279A(1)(c) a person is within the charge to capital gains tax in any year if—

• (a) he is chargeable to capital gains tax in respect of chargeable gains accruing to him in that year, or

• (b) the person would be so chargeable if—

• (i) chargeable gains accrued to the person in the year, and

• (ii) the amount calculated under section 1(3) for the year in relation to the person exceeded the exempt amount for the year (within the meaning of section 1K).

• (2) Subsections (3) to (6) below have effect for the purposes of section 279A(2)(e) (right to unascertainable consideration).

• (3) A right is a right to unascertainable consideration if, and only if,—

• (a) it is a right to consideration the amount or value of which is unascertainable at the time when the right is conferred, and

• (b) that amount or value is unascertainable at that time on account of its being referable, in whole or in part, to matters which are uncertain at that time because they have not yet occurred.

This subsection is subject to subsections (4) to (6) below.

• (4) The amount or value of any consideration is not to be regarded as being unascertainable by reason only—

• (a) that the right to receive the whole or any part of the consideration is postponed or contingent, if the consideration or, as the case may be, that part of it is, in accordance with section 48, brought into account in the computation of the gain accruing to the taxpayer on the disposal of an asset, or

• (b) in a case where the right to receive the whole or any part of the consideration is postponed and is to be, or may be, to any extent satisfied by the receipt of property of one description or property of some other description, that some person has a right to select the property, or the description of property, that is to be received.

• (5) A right is not to be taken to be a right to unascertainable consideration by reason only that either the amount or the value of the consideration has not been fixed, if—

• (a) the amount will be fixed by reference to the value, and the value is ascertainable, or

• (b) the value will be fixed by reference to the amount, and the amount is ascertainable.

• (6) A right which is by virtue of subsection (2) or (4) of section 138A (use of earn-out rights for exchange of securities) assumed in accordance with subsection (3)(a) of that section to be a security, within the definition in section 132, is not to be regarded as a right to unascertainable consideration.

• (7) For the purposes of section 279A, any question as to—

• (a) whether a chargeable gain or a loss is one that accrues (or would, apart from any particular provision, accrue) on a particular disposal or a disposal of any particular description, or

• (b) the time at which, or year in which, any particular disposal takes place,

is to be determined without regard to section 1M (chargeable gains and losses accruing during temporary non-residence to be treated as accruing in period of return). This subsection is subject to subsection (8) below.

• (8) Subsection (7) above does not affect the determination of any question—

• (a) as to the period in which the chargeable gain or loss is, by virtue of section 1M, to be treated as accruing (apart from section 279C), or

• (b) where (apart from section 279C) a loss is to be treated by virtue of section 1M as accruing in a particular period, whether the loss is an allowable loss.

Effect of election under section 279A

279C

• (1) This section applies where an election is made under section 279A by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section.

• (2) Where this section applies, the relevant loss shall be treated for the purposes of capital gains tax as if it were a loss accruing to the taxpayer in the earliest year which is an eligible year (the “first eligible year”), instead of in the year of the loss (but subject to, and in accordance with, the following provisions of this section).

• (3) The amount of the relevant loss that falls to be deducted (in accordance with section 1(3)(a)) from the chargeable gains of the first eligible year is limited to the first year limit.

• (4) The first year limit is the amount calculated under section 1(3) ... for the first eligible year.

The amount so found is the first year limit in a case where section 2(5)(aa) applies in relation to the first eligible year.

• (4A) For the purpose of making that calculation—

• (a) no account is to be taken of the relevant loss, but

• (b) the effect of any previous election under section 279A is to be taken into account.

• (5) As respects any later year before the year of the loss, the relevant loss (so far as not previously allowed as a deduction from chargeable gains accruing in any previous year) falls to be deducted in accordance with section 1(3)(b) only if that later year is an eligible year.

• (6) The amount of the relevant loss that falls to be deducted from chargeable gains of that later eligible year in accordance with section 1(3)(b) is limited to the amount (the “later year limit”) in respect of which the taxpayer would be chargeable to capital gains tax for that later year—

• (a) on the assumption in subsection (7) below, and

• (b) taking account of any previous elections under section 279A, ...

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) The assumption is that no part of—

• (a) the relevant loss, or

• (b) any loss in respect of which an election under section 279A may be, but has not been, made,

falls to be deducted, in consequence of an election under section 279A, from any chargeable gains accruing to the taxpayer in that later eligible year.

The assumption falls to be made immediately after the making of the election in respect of the relevant loss.

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) All such adjustments shall be made, whether by discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to the election under section 279A made by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section.

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Elections under section 279A

279D

• (1) An election under section 279A is irrevocable.

• (2) Any election under that section must be made by giving a notice in accordance with this section.

• (3) The notice must be given to an officer of the Board.

• (4) Subsections (5) to (8) below have effect in relation to the notice given by the taxpayer in respect of the relevant loss.

• (5) The notice must specify each of the following—

• (a) the amount of the relevant loss;

• (b) the right disposed of;

• (c) the year of the right’s disposal;

• (d) the year of the loss (if different from the year of the right’s disposal);

• (e) the year in which the right was acquired;

• (f) the original asset or assets.

• (6) The notice must also specify each of the following—

• (a) the eligible year in which the relevant loss is to be treated in accordance with section 279C(2) as accruing to the taxpayer;

• (b) the first year limit (see section 279C(3) and (4));

• (c) how much of the relevant loss falls to be deducted in accordance with section 1(3)(a) from chargeable gains accruing to the taxpayer in that year.

• (7) If, in accordance with section 279C, any part of the relevant loss falls to be deducted in accordance with section 1(3)(b) from chargeable gains accruing to the taxpayer in any later eligible year, the notice must also specify—

• (a) each such year;

• (b) in the case of each such year, the later year limit (see section 279C(6));

• (c) how much of the relevant loss falls to be deducted in accordance with section 1(3)(b) in each such year from chargeable gains accruing to the taxpayer in that year.

• (8) The notice must be given on or before the first anniversary of the 31st January next following the year of the loss.

• (9) An election under section 279A is made on the date on which the notice of the election is given.

• (10) Different notices must be given in respect of different losses.

• (11) Where a person makes two or more elections under section 279A on the same day, the notices must specify the order in which the elections are made.

• (12) For the purposes of any provisions of sections 279A to 279C whose operation is affected by the order in which any elections under section 279A are made, elections made by a person on the same day shall be treated as made at different times and in the order specified in accordance with subsection (11) above.

Consideration payable by instalments.

280

If the consideration, or part of the consideration, taken into account in the computation of the gain is payable by instalments over a period beginning not earlier than the time when the disposal is made, being a period exceeding 18 months, then, at the option of the person making the disposal, the tax on a chargeable gain accruing on the disposal may be paid by such instalments as the Board may allow over a period not exceeding 8 years and ending not later than the time at which the last of the first-mentioned instalments is payable.

Payment by instalments of tax on gifts.

281

• (1) Subsection (2) below applies where—

• (a) the whole or any part of any assets to which this section applies is disposed of by way of gift or is deemed to be disposed of under section 71(1) or 72(1), and

• (b) the disposal is one—

• (i) to which neither section 165(4) nor section 260(3) applies (or would apply if a claim were duly made), or

• (ii) to which either of those sections does apply but on which the held-over gain (within the meaning of the section applying) is less than the chargeable gain which would have accrued on that disposal apart from that section.

• (2) Where this subsection applies, the capital gains tax chargeable on a gain accruing on the disposal may, if the person paying it by notice to an officer of the Board so elects, be paid by 10 equal yearly instalments.

• (3) The assets to which this section applies are—

• (a) land or an estate or interest in land,

• (b) any shares or securities of a company which, immediately before the disposal, gave control of the company to the person by whom the disposal was made or deemed to be made, and

• (c) any shares or securities of a company not falling under paragraph (b) above and not listed on a recognised stock exchange ... .

• (4) Where tax is payable by instalments by virtue of this section, the first instalment shall be due on the day on which the tax would be payable apart from this section.

• (5) Subject to the following provisions of this section—

• (a) tax payable by instalments by virtue of this section carries interest in accordance with Part IX of the Management Act as that Part applies where no election is made under subsection (2) above, and

• (b) the interest on the unpaid portion of the tax shall be added to each instalment and paid accordingly.

• (6) Tax payable by instalments by virtue of this section which is for the time being unpaid, with interest (determined in accordance with subsection (5)(a) above) to the date of payment, may be paid at any time.

• (7) Tax which apart from this subsection would be payable by instalments by virtue of this section and which is for the time being unpaid, with interest (determined in accordance with subsection (5)(a) above as if the tax were tax payable by instalments by virtue of this section) to the date of payment, shall become due and payable immediately if—

• (a) the disposal was by way of gift to a person connected with the donor or was deemed to be made under section 71(1) or 72(1), and

• (b) the assets are disposed of for valuable consideration under a subsequent disposal (whether or not the subsequent disposal is made by the person who acquired them under the first disposal).

• (8) Subsection (2) above applies in relation to a chargeable gain accruing to a transferor under section 169C(7) (clawback of relief under section 165 or 260 if settlement becomes settlor-interested etc) as it applies in relation to a gain accruing to a person on a disposal if—

• (a) the relevant disposal (within the meaning of section 169C) in question was a disposal of the whole or any part of any assets to which this section applies, and

• (b) at the material time (within the meaning of that section), no part of the subject-matter of that relevant disposal has been disposed of for valuable consideration under a subsequent disposal (whether made by the trustees to whom that relevant disposal was made or by some other person).

• (9) Where subsection (2) above so applies, subsections (4) to (7) above apply accordingly but as if for paragraphs (a) and (b) of subsection (7) there were substituted “any part of the subject-matter of the relevant disposal in question is disposed of for valuable consideration under a subsequent disposal (whether made by the trustees to whom that relevant disposal was made or by some other person).”.

Recovery of tax from donee.

282

• (1) If in any year of assessment a chargeable gain accrues to any person on the disposal of an asset by way of gift and any amount of capital gains tax assessed on that person for that year of assessment is not paid within 12 months from the date when the tax becomes payable, the donee may, by an assessment made not later than 2 years from the date when the tax became payable, be assessed and charged (in the name of the donor) to capital gains tax on an amount not exceeding the amount of the chargeable gain so accruing, and not exceeding the grossed up amount of that capital gains tax unpaid at the time when he is so assessed, grossing up at the marginal rate of tax, that is to say, taking capital gains tax on a chargeable gain at the amount which would not have been chargeable but for that chargeable gain.

• (2) A person paying any amount of tax in pursuance of this section shall be entitled to recover a sum of that amount from the donor.

• (3) References in this section to a donor include, in the case of an individual who has died, references to his personal representatives.

• (4) In this section references to a gift include references to any transaction otherwise than by way of a bargain made at arm’s length so far as money or money’s worth passes under the transaction without full consideration in money or money’s worth, and “donor” and “donee” shall be construed accordingly; and this section shall apply in relation to a gift made by 2 or more donors with the necessary modifications and subject to any necessary apportionments.

• (5) This section applies in relation to a chargeable gain accruing to a transferor under section 169C(7) (clawback of relief under section 165 or 260 if settlement becomes settlor-interested etc) as it applies in relation to a chargeable gain accruing to a person on the disposal of an asset by way of gift.

• (6) For the purposes of this section as applied by subsection (5) above—

• (a) the transferor shall be taken to be the donor, and

• (b) the trustees to whom the relevant disposal (within the meaning of section 169C) in question was made shall be taken to be the donee.

Repayment supplements.

283

• (1) Subject to the provisions of this section, where in the case of capital gains tax paid by or on behalf of an individual for a year of assessment a repayment of that tax is made by the Board or an officer of the Board, the repayment shall be increased under this section by an amount (“a repayment supplement”) equal to interest on the amount repaid at the rate applicable under section 178 of the Finance Act 1989 for the period (if any) between the relevant time and the date on which the order for the repayment is issued.

• (2) For the purposes of subsection (1) above, the relevant time is the date on which the tax was paid.

• (3) A repayment supplement shall not be payable under this section in respect of a repayment or payment made in consequence of an order or judgment of a court having power to allow interest on the repayment or payment.

• (4) Subsections (1) to (3) above shall apply in relation to the trustees of a settlement or the personal representatives of a deceased person ... as they apply in relation to an individual.