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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.

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(a) an individual's liability to income tax has been reduced (or treated by virtue of section 257H of ITA 2007 (spouses and civil partners) as reduced) for any tax year under section 257AB of that Act in respect of an issue of shares,

(b) the amount of the reduction (“R”) is less than the amount (“T”) which is equal to tax at the SEIS rate on the amount subscribed for the issue, and

(5) If there is a disposal of the shares on which there is a gain, subsection (2) applies only to so much of the gain as is found by multiplying it by the fraction—

$R T$

(6) Any question as to—

(a) which of any shares that—

(i) are acquired by an individual at different times, and

(ii) are shares to which SEIS relief is attributable,

a disposal relates to, or

(b) whether a disposal relates to shares to which SEIS relief is attributable,

is to be determined for the purposes of capital gains tax as for the purposes of section 257HA of ITA 2007.

Chapter 1 of this Part has effect subject to this subsection.

(7) Sections 104, 105 and 106A do not apply to shares to which SEIS relief is attributable.

(8) Where—

(a) an individual holds shares (“the existing holding”) which form part of the ordinary share capital of a company,

(b) there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and

(c) immediately following the reorganisation, SEIS relief is attributable to the existing holding or the allotted shares,

sections 127 to 130 do not apply in relation to the existing holding.

(9) Sections 135 and 136 do not apply in respect of shares to which SEIS relief is attributable.

(10) Subsection (9) does not have effect to disapply section 135 or 136 where—

(a) the new holding consists of new ordinary shares carrying no present or future preferential right to dividends or to a company's assets on its winding up and no present or future right to be redeemed,

(b) the new shares are issued after the end of the relevant period, and

(11) The condition is that at some time before the issue of the new shares—

(a) the company issuing them issued eligible shares, and

(b) a certificate in relation to those eligible shares was issued by the company for the purposes of section 257EB(1) of ITA 2007 and in accordance with sections 257EC and 257ED of that Act.

(12) All such adjustments of capital gains tax are to be made, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of the SEIS relief being given or withdrawn.

(13) Where shares to which SEIS relief is attributable are exchanged for other shares in circumstances such that section 257HB of ITA 2007 (acquisition of share capital by new company) applies—

(a) subsection (9) above does not have effect to disapply section 135, and

(b) sections 257HB(3)(b), 257HC(2)(a) and 257HD of ITA 2007 apply for the purposes of this section as they apply for the purposes of Part 5A of that Act.

(14) For the purposes of this section—

“eligible shares” means shares that meet the requirements of section 257CA(2);

“new holding” is to be construed in accordance with sections 126, 127, 135 and 136;

“ordinary share capital” has the meaning given in section 989 of ITA 2007;

“ordinary shares”, in relation to a company, means shares forming part of its ordinary share capital;

“relevant period” means the period found by applying section 257AC(2) of ITA 2007 by reference to the company issuing the shares referred to in subsection (9) and by reference to those shares;

“the SEIS rate” has the meaning given by section 257AB(3) of ITA 2007;

“SEIS relief” means relief under Part 5A of ITA 2007 (seed enterprise investment scheme);

and that Part applies to determine whether SEIS relief is attributable to any shares and, if so, the amount of SEIS relief so attributable.

Seed enterprise investment scheme: reduction of relief

150F

(1) This section has effect where—

(a) section 150E(2) applies on a disposal of shares, and

(b) before the disposal, value is received in circumstances where SEIS relief attributable to the shares is reduced by an amount under section 257FE(2)(a) of ITA 2007.

(2) If section 150E(2) applies on the disposal but section 150E(5) does not, section 150E(2) applies only to so much of the gain as remains after deducting so much of it as is found by multiplying it by the fraction—

$$A B$where—A is the amount by which the SEIS relief attributable to the shares is reduced as mentioned in subsection (1), andB is the amount of the relief attributable to the shares.$

(3) If section 150E(2) and (5) apply on the disposal, section 150E(2) applies only to so much of the gain as is found by—

(a) taking the part of the gain found under section 150E(5), and

(b) deducting from that part so much of it as is found by multiplying it by the fraction mentioned in subsection (2) above.

(4) Where the SEIS relief attributable to the shares is reduced as mentioned in subsection (1) by more than one amount, “A” in subsection (2) is to be taken to be equal to the aggregate of the amounts.

(5) The amount which is “B” in subsection (2) is to be found without regard to any reduction mentioned in subsection (1).

(6) For the purposes of this section, Part 5A of ITA 2007 (seed enterprise investment scheme) applies to determine whether SEIS relief is attributable to any shares and, if so, the amount of SEIS relief so attributable.

Seed enterprise investment scheme: re-investment

150G

Schedule 5BB to this Act (which provides relief in respect of re-investment under the seed enterprise investment scheme ... ) has effect.

Personal equity plans.

151

(1) The Treasury may make regulations providing that an individual who invests under a plan shall be entitled to relief from capital gains tax in respect of the investments.

(2) The provisions of Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans), except sections 694(1) to (2) and 694A(1), shall apply in relation to regulations made under subsection (1) as they apply to regulations made under section 694(1), but with the following modifications—

(a) any reference to income tax is to be read as a reference to capital gains tax,

(aa) section 694A(2) applies also for the purposes of subsection (1) of this section,

(ab) the reference in section 694A(3) to section 694A(1) is to be read as a reference to paragraph (aa) of this subsection,

(ac) the reference in section 694A(4)(b)(iii) to the individual's income from investments under the plan being exempt from income tax is to be read as a reference to the individual being entitled to relief from capital gains tax in respect of the investments,

(b) the reference in section 695A(1) to the case where regulations provide that income of a child from investments under a plan is exempt from income tax is to be read as a reference to the case where regulations provide that a child who invests under a plan is entitled to relief from capital gains tax in respect of the investments,

(d) that Chapter has effect as if sections 699(9) and 701(6) were omitted.

(3) Regulations under this section may include provision securing that losses are disregarded for the purposes of capital gains tax where they accrue on the disposal of investments on or after 18th January 1988.

(4) Regulations under this section may include provision which, for cases where a person subscribes to a plan by transferring or renouncing shares or rights to shares—

(a) modifies the effect of this Act in relation to their acquisition and their transfer or renunciation; and

(b) makes consequential modifications of the effect of this Act in relation to anything which (apart from the regulations) would have been regarded on or after their acquisition as an indistinguishable part of the same asset.

Venture capital trusts: reliefs.

151A

(1) A gain or loss accruing to an individual on a qualifying disposal of any ordinary shares in a company which—

(a) was a venture capital trust at the time when he acquired the shares, and

(b) is still such a trust at the time of the disposal,

shall not be a chargeable gain or, as the case may be, an allowable loss.

(2) For the purposes of this section a disposal of shares is a qualifying disposal in so far as—

(a) it is made by an individual who has attained the age of eighteen years;

(b) the shares disposed of were not acquired in excess of the permitted maximum for any year of assessment; and

(c) that individual acquired those shares for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In determining for the purposes of this section whether a disposal by any person of shares in a venture capital trust relates to shares acquired in excess of the permitted maximum for any year of assessment, it shall be assumed (subject to subsection (5) below)—

(a) as between shares acquired by the same person on different days, that those acquired on an earlier day are disposed of by that person before those acquired on a later day; and

(b) as between shares acquired by the same person on the same day, that those acquired in excess of the permitted maximum are disposed of by that person before he disposes of any other shares acquired on that day.

(5) It shall be assumed for the purposes of subsection (1) above that a person who disposes of shares in a venture capital trust disposes of shares acquired at a time when it was not such a trust before he disposes of any other shares in that trust.

(6) References in this section to shares in a venture capital trust acquired in excess of the permitted maximum for any year of assessment shall be construed as references to shares not acquired within the limit in section 709(4) of ITTOIA 2005; and the question whether shares are acquired within that limit shall be determined as it is for the purposes of Chapter 5 of Part 6 of that Act.

(7) In this section and section 151B “ordinary shares”, in relation to a company, means any shares forming part of the company’s ordinary share capital (within the meaning given in section 989 of ITA 2007).

Venture capital trusts: supplementary.

151B

(1) Sections 104, 105 and 106A shall not apply to any shares in a venture capital trust which are eligible for relief under section 151A(1).

(2) Subject to the following provisions of this section, where—

(a) an individual holds any ordinary shares in a venture capital trust,

(b) some of those shares fall within one of the paragraphs of subsection (3) below, and

then, if there is within the meaning of section 126 a reorganisation affecting those shares, section 127 shall apply separately in relation to the shares (if any) falling within each of the paragraphs of that subsection (so that shares of each kind are treated as a separate holding of original shares and identified with a separate new holding).

(3) The kinds of shares referred to in subsection (2) above are—

(a) any shares in a venture capital trust which are eligible for relief under section 151A(1) and by reference to which any person has obtained or is entitled to claim relief under Chapter 2 of Part 6 of ITA 2007;

(b) any shares in a venture capital trust which are eligible for relief under section 151A(1) but by reference to which no person has obtained, or is entitled to claim, any relief under that Chapter of that Part;

(c) any shares in a venture capital trust by reference to which any person has obtained, or is entitled to claim, any relief under that Chapter of that Part but which are not shares that are eligible for relief under section 151A(1); and

(d) any shares in a venture capital trust that do not fall within any of paragraphs (a) to (c) above.

(4) Where—

(a) an individual holds ordinary shares in a company (“the existing holding”),

(b) there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and

(c) immediately following the reorganisation, the shares or the allotted holding are shares falling within any of paragraphs (a) to (c) of subsection (3) above,

sections 127 to 130 shall not apply in relation to the existing holding.

(5) Sections 135 and 136 shall not apply where—

(a) the exchanged holding consists of shares falling within paragraph (a) or (b) of subsection (3) above; and

(b) that for which the exchanged holding is or is treated as exchanged does not consist of ordinary shares in a venture capital trust.

(6) Where—

(a) the approval of any company as a venture capital trust is withdrawn, and

(b) the withdrawal of the approval is not one to which section 281(3) of ITA 2007 applies,

any person who at the time when the withdrawal takes effect is holding shares in that company which (apart from the withdrawal) would be eligible for relief under section 151A(1) shall be deemed for the purposes of this Act, at that time, to have disposed of and immediately re-acquired those shares for a consideration equal to their market value at that time.

(7) The disposal that is deemed to take place by virtue of subsection (6) above shall be deemed for the purposes of section 151A to take place while the company is still a venture capital trust; but, for the purpose of applying sections 104, 105 and 106A to the shares that are deemed to be re-acquired, it shall be assumed that the re-acquisition for which that subsection provides takes place immediately after the company ceases to be such a trust.

(8) For the purposes of this section—

(a) shares are eligible for relief under section 151A(1) at any time when they are held by an individual whose disposal of the shares at that time would (on the assumption, where it is not the case, that the individual attained the age of eighteen years before that time) be a disposal to which section 151A(1) would apply; and

(b) shares shall not, in relation to any time, be treated as shares by reference to which relief has been obtained under Chapter 2 of Part 6 of ITA 2007 if that time falls after—

(i) any relief given by reference to those shares has been reduced or withdrawn,

(ii) any chargeable event (within the meaning of Schedule 5C) has occurred in relation to those shares, or

(iii) the death of a person who held those shares immediately before his death;

and

(c) a reference to the exchanged holding is, in relation to section 135 or 136, to the shares in the company referred to in that section as company A.

CITR: identification of securities or shares on a disposal

151BA

(1) This section applies for the purpose of identifying the securities or shares disposed of in any case where—

(a) an individual or company (“the investor”) disposes of part of a holding of securities or shares (“the holding”), and

(b) the holding includes securities or shares to which CITR is attributable in respect of one or more years of assessment or accounting periods that have been held by the investor continuously from the time they were issued until the disposal.

(2) Any disposal by the investor of securities or shares included in the holding which have been acquired by the investor on different days is treated as relating to those acquired on an earlier day rather than to those acquired on a later day.

(3) If there is a disposal by the investor of securities or shares included in the holding which have been acquired by the investor on the same day, any of those securities or shares—

(a) to which CITR is attributable, and

(b) which have been held by the investor continuously from the time they were issued until the time of disposal,

are treated as disposed of after any other securities or shares included in the holding which were acquired by the investor on that day.

(4) For the purposes of this section a holding of securities is any number of securities of a company which—

(a) carry the same rights,

(b) were issued under the same terms, and

It does not matter for this purpose that the number of the securities grows or diminishes as securities carrying those rights and issued under those terms are acquired or disposed of.

(5) For the purposes of this section a holding of shares is any number of shares in a company which—

(a) are of the same class, and

(b) are held by the investor in the same capacity.

It does not matter for this purpose that the number of the shares grows or diminishes as shares of that class are acquired or disposed of.

(6) Chapter 1 of Part 4 (share pooling, etc) has effect subject to this section.

(7) Sections 104 to 107 (which make provision for the identification of securities and shares on a disposal) do not apply to securities or shares to which CITR is attributable.

(8) In a case to which section 127 (equation of original shares and new holding) applies, shares included in the new holding are treated for the purposes of subsections (2) and (3) as acquired when the original shares were acquired.

(9) In subsection (8)—

(a) the reference to section 127 includes a reference to that section as it is applied by virtue of any enactment relating to chargeable gains, and

(b) “original shares” and “new holding” have the same meaning as in section 127, or (as the case may be) that section as applied by virtue of the enactment in question.

(10) In this section and sections 151BB and 151BC—

(a) if the investor is an individual—

(i) “CITR” has the meaning given by section 333 of ITA 2007,

(ii) references to CITR being attributable to securities, shares or debentures are to be read in accordance with section 357 of that Act, and

(iii) references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with section 380 of that Act,

(b) if the investor is a company—

(i) “CITR” means relief under Part 7 of CTA 2010,

(ii) references to CITR being attributable to securities, shares or debentures are to be read in accordance with section 240 of that Act, and

(iii) references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with section 267 of that Act.

CITR: rights issues etc

151BB

(1) If—

(a) an individual or company (“the investor”) holds shares in the CDFI which are of the same class and held in the same capacity (“the existing holding”),

(b) there is a reorganisation affecting the existing holding as a result of an allotment which—

(i) falls within section 126(2)(a) (an allotment of shares or debentures in respect of and in proportion to an original holding), and

(ii) is not an allotment of corresponding bonus shares,

(c) immediately after the reorganisation, CITR is attributable to the shares included in the existing holding or the shares or debentures allotted in respect of those shares, in respect of one or more years of assessment or accounting periods, and

(d) if CITR is attributable to the shares included in the existing holding at that time, those shares have been held by the investor continuously from the time they were issued until the reorganisation,

sections 127 to 130 (treatment of share capital following a reorganisation) do not apply in relation to the existing holding.

(2) Section 116(10) (reorganisations, conversions and reconstructions) does not apply in any case where the old asset consists of shares held (in the same capacity) by the investor—

(a) that have been held by the investor continuously from the time they were issued until the relevant transaction, and

(b) to which CITR is attributable immediately before that transaction.

In this subsection “old asset” and “the relevant transaction” have the meaning given by section 116.

(3) For the purposes of subsection (1)—

“corresponding bonus shares” means bonus shares that—are issued in respect of shares included in the existing holding, andare in the same company, are of the same class, and carry the same rights as, those shares,

“reorganisation” has the meaning given in section 126.

(4) The following provisions of this Act have effect subject to this section—

section 116 (reorganisations, conversions and reconstructions);

Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).

(5) In this section “the CDFI” is to be read—

(a) if the investor is an individual, in accordance with section 334(2) of ITA 2007,

(b) if the investor is a company, in accordance with section 219(2) of CTA 2010.

CITR: company reconstructions etc

151BC

(1) If—

(a) an individual or company (“the investor”) holds shares in or debentures of a company (“company A”),

(b) there is a reconstruction or amalgamation affecting that holding (“the existing holding”),

(c) immediately before the reconstruction or amalgamation, CITR is attributable to the shares or debentures included in the existing holding in respect of one or more years of assessment or accounting periods, and

(d) the shares or debentures included in the existing holding have been held by the investor continuously from the time they were issued until the reconstruction or amalgamation,

sections 135 and 136 (share exchanges and company reconstructions) do not apply in respect of the existing holding.

(2) Subsection (1)(a) applies only if the shares or debentures are held by the investor in the same capacity.

(3) For the purposes of subsection (1) a “reconstruction or amalgamation” means an issue by a company of shares in or debentures of that company in exchange for or in respect of shares in or debentures of company A.

(4) The following provisions of this Act have effect subject to this section—

section 116 (reorganisations, conversions and reconstructions),

Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).

(5) The investor is treated as disposing of any securities or shares which but for subsection (1) the investor—

(a) would be treated as exchanging for other securities or shares by virtue of section 136, or

(b) would be so treated but for section 137(1) (which restricts section 136 to genuine reconstructions).

Strips: manipulation of price: associated payment giving rise to loss

151C

(1) This section applies if—

(a) as a result of any scheme or arrangement which has an unallowable purpose, the circumstances are, or might have been, as mentioned in paragraph (a), (b) or (c) of section 449(2) of ITTOIA 2005,

(b) under the scheme or arrangement, a payment falls to be made otherwise than in respect of the acquisition or disposal of a strip, and

(2) The loss shall not be an allowable loss.

(3) For the purposes of this section a scheme or arrangement has an unallowable purpose if the main benefit, or one of the main benefits that might have been expected to result from, or from any provision of, the scheme or arrangement (apart from section 449 of ITTOIA 2005 and this section) is—

(a) the obtaining of a tax advantage by any person, or

(b) the accrual to any person of an allowable loss.

(4) The reference in subsection (1)(b) to the acquisition or disposal of a strip shall be construed as if it were in Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) (see, in particular, sections 437 and 445 of that Act for the meaning of “disposal” and “acquisition” and section 444 of that Act for the meaning of “strip”).

(5) In subsection (3)(a) “tax advantage” has the meaning given by section 1139 of CTA 2010.

(6) This section applies to losses accruing on or after 17th March 2004.

Corporate strips: manipulation of price: associated payment giving rise to loss

151D

(1) This section applies if—

(a) as a result of any scheme or arrangement which has an unallowable purpose, the circumstances are, or might have been, as mentioned in paragraph (a), (b) or (c) of section 452G(2) of ITTOIA 2005,

(b) under the scheme or arrangement, a payment falls to be made otherwise than in respect of the acquisition or disposal of a corporate strip, and

(2) The loss shall not be an allowable loss.

(3) For the purposes of this section a scheme or arrangement has an unallowable purpose if the main benefit, or one of the main benefits, that might have been expected to result from, or from any provision of, the scheme or arrangement (apart from section 452G of ITTOIA 2005 and this section) is—

(a) the obtaining of a tax advantage by any person, or

(b) the accrual to any person of an allowable loss.

(4) The reference in subsection (1)(b) above to the acquisition or disposal of a corporate strip shall be construed as if it were in Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) (see, in particular, sections 437 and 452F of that Act for the meaning of “disposal” and section 452E of that Act for the meaning of “corporate strip”).

(5) In subsection (3)(a) above “tax advantage” has the meaning given by section 1139 of CTA 2010.

(6) This section applies to losses accruing on or after 6th April 2005.

Exchange gains and losses from loan relationships: regulations

151E

(1) The Treasury may by regulations make provision for or in connection with bringing into account in prescribed circumstances for the purposes of this Act exchange gains or losses (as defined by section 475 of CTA 2009) to which section 328(1) of CTA 2009 does not apply because of section 328(3) of that Act or because of regulations under section 328(4) of that Act.

(1A) The regulations may make provision as to the way in which, including the currency by reference to which, the amounts to be brought into account are to be calculated.

(2) The regulations may—

(a) make different provision for different cases, and

(b) make provision subject to an election or to other prescribed conditions.

Treatment of alternative finance arrangements

151F

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

Regulations where non-qualifying shares conditions altered

151G

(1) If the Treasury make regulations under section 533 of CTA 2009 (power to change conditions for non-qualifying shares) adding, varying or removing such a condition as is mentioned in subsection (1) of that section, they may also by regulations amend this Act so as to make provision for or in connection with taxation in the case of any asset or transaction that is or was mentioned in the condition.

(2) Regulations under this section may—

(a) make different provision for different cases, and

(b) make incidental, supplemental, consequential and transitional provisions and savings.

(3) Regulations made under subsection (2)(b) may, in particular, include provision amending any enactment or any instrument made under an enactment.

Chapter 4 — Alternative finance arrangements

Introduction

151H

(1) This Chapter makes provision about the treatment of alternative finance arrangements ... and alternative finance return under such arrangements for the purposes of this Act (see sections 151T to 151Y).

(2) In this Chapter “alternative finance arrangements” means—

(a) purchase and resale arrangements,

(b) diminishing shared ownership arrangements,

(d) profit share agency arrangements, and

(e) investment bond arrangements.

(3) In this Chapter—

(a) “purchase and resale arrangements” means arrangements to which section 151J applies,

(b) “diminishing shared ownership arrangements” means arrangements to which section 151K or 151KA applies,

(d) “profit share agency arrangements” means arrangements to which section 151M applies, and

(e) “investment bond arrangements” means arrangements to which section 151N applies.

(4) For the meaning of “alternative finance return”, see sections 151P to 151S.

(5) For the meaning of “financial institution”, see section 151I.

(6) Also, see—

(a) section 366 of TIOPA 2010 (power to extend this Chapter and other provisions to other arrangements by order), and

(b) Schedule 61 to FA 2009 (alternative finance investment bonds) which makes further provision about the treatment of investment bond arrangements for the purposes of this Act.

Meaning of “financial institution”

151I

(1) In this Chapter “financial institution” means—

(a) a bank, as defined by section 1120 of CTA 2010,

(b) a building society,

(i) of a bank within paragraph (a), or

(ii) of a building society,

(d) a person with permission under Part 4A of the Financial Services and Markets Act 2000 to enter into, or to exercise or have the right to exercise rights and duties under, a contract of the kind mentioned in paragraph 23 or paragraph 23B of Schedule 2 to that Act (credit agreements and contracts for hire of goods);

(e) a bond-issuer, within the meaning of section 151N, but only in relation to any bond assets which are rights under purchase and resale arrangements, diminishing shared ownership arrangements or profit share agency arrangements,

(f) a person authorised in a jurisdiction outside the United Kingdom—

(i) to receive deposits or other repayable funds from the public, and

(ii) to grant credits for its own account,

(g) an insurance company as defined in section 65 of the Finance Act 2012, or

(h) a person who is authorised in a jurisdiction outside the United Kingdom to carry on a business which consists of effecting or carrying out contracts of insurance or substantially similar business but not an insurance special purpose vehicle as defined in section 139(1) of the Finance Act 2012.

(2) For the purposes of subsection (1)(c) a company is a wholly-owned subsidiary of a bank or building society (“the parent”) if it has no members except—

(a) the parent or persons acting on behalf of the parent, and

(b) the parent's wholly-owned subsidiaries or persons acting on behalf of the parent's wholly-owned subsidiaries.

Arrangements that are alternative finance arrangements

Purchase and resale arrangements

151J

(1) This section applies to arrangements if—

(a) they are entered into between two persons (“the first purchaser” and “the second purchaser”), and—

(i) at least one of those persons is a financial institution, or

(ii) the arrangements are regulated electronic system facilitated arrangements, and

(b) under the arrangements—

(i) the first purchaser purchases an asset and sells it to the second purchaser,

(ii) the sale occurs immediately after the purchase or in the circumstances mentioned in subsection (2),

(iii) all or part of the second purchase price is not required to be paid until a date later than that of the sale,

(iv) the second purchase price exceeds the first purchase price, and

(v) the excess equates, in substance, to the return on an investment of money at interest.

(2) The circumstances are that—

(a) the first purchaser is a financial institution, and

(b) the asset referred to in subsection (1)(b)(i) was purchased by the first purchaser for the purpose of entering into arrangements within this section.

(2A) Arrangements are regulated electronic system facilitated arrangements if—

(a) the arrangements substantially consist of an article 36H agreement in relation to the deferral of the payment of all or part of the second purchase price,

(b) the first purchaser would be regarded, for the purposes of that agreement, as the lender under it,

(d) those purchasers becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).

(3) In this section—

“the first purchase price” means the amount paid by the first purchaser in respect of the purchase, ...

“the second purchase price” means the amount payable by the second purchaser in respect of the sale,

“article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and

“borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order.

(4) This section is subject to section 151O (provision not at arm's length: exclusion of arrangements from this section and sections 151K to 151N).

Diminishing shared ownership arrangements : initial acquisition

151K

(1) This section applies to arrangements if under them—

(a) a person (“the financier”) acquires a beneficial interest in an asset,

(aa) either—

(i) the financier is a financial institution or a regulated home purchase plan provider, or

(ii) the arrangements are regulated electronic system facilitated arrangements,

(b) another person (“the customer”) also acquires a beneficial interest in it,

(c) the customer is to make payments to the financier amounting in aggregate to the consideration paid for the acquisition of the financier’s beneficial interest (but subject to any adjustment required for such a reduction as is mentioned in subsection (5)),

(d) the customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments,

(e) the customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise),

(f) the customer has the exclusive right to occupy or otherwise to use the asset, and

(g) the customer is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including, in particular, an increase in its value).

(1A) Arrangements are regulated electronic system facilitated arrangements if—

(a) the arrangements substantially consist of an article 36H agreement in relation to the enjoyment by the customer of the rights referred to in subsection (1)(f) and (g) before the customer’s acquisition of the first owner’s beneficial interest,

(b) the customer would be regarded, for the purposes of that agreement, as the borrower under it,

(d) the customer and the financier becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).

(2) For the purposes of subsection (1)(a) it does not matter if—

(a) the financier acquires its beneficial interest from the customer,

(b) the customer, or another person who is not the financier, also has a beneficial interest in the asset, or

(3) Subsection (1)(f) does not prevent the customer from granting an interest or right in relation to the asset if the conditions in subsection (4) are met.

(4) The conditions are that—

(a) the grant is not to—

(i) the financier,

(ii) a person controlled by the financier, or

(iii) a person controlled by a person who also controls the financier, and

(b) the grant is not required by the financier or arrangements to which the financier is a party.

(5) Subsection (1)(g) does not prevent the financier from—

(a) having responsibility for any reduction in the asset's value, or

(b) having a share in a loss arising out of any such reduction.

(6) Section 1124 of CTA 2010 (meaning of “control”) applies for the purposes of this section.

(7) In this section—

“article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

“borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order;

“regulated home purchase plan provider” means a person who—is carrying on the regulated activity specified in article 63F(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (entering into regulated home purchase plans as home purchase provider), andhas permission under Part 4A of the Financial Services and Markets Act 2000 to do so.

(7) This section is subject to section 151O (provision not at arm's length: exclusion of arrangements from section 151J, this section and sections 151KA to 151N).

Diminishing shared ownership arrangements: refinancing

151KA

(1) This section applies to arrangements if under them—

(a) a person (“the customer”) has a beneficial interest in an asset,

(b) the customer disposes of some or all of their beneficial interest in the asset to another person (“the financier”),

(i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 151K(7)), or

(ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 151K(1A)),

(d) the customer is to make payments to the financier amounting in aggregate to the consideration paid for the financier acquiring a beneficial interest as mentioned in paragraph (b) (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)),

(e) the customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments,

(f) the customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise),

(g) the customer has the exclusive right to occupy or otherwise to use the asset, and

(h) the customer is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including, in particular, an increase in its value).

(2) This section also applies to arrangements which supersede arrangements to which section 151K or subsection (1) of this section applies if under them—

(a) a person (“the financier”) acquires so much of the beneficial interest in an asset mentioned in section 151K(1)(a) or subsection (1)(b) of this section as has not yet been acquired as mentioned in section 151K(1)(d) or subsection (1)(e) of this section,

(b) either—

(i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 151K(7)), or

(ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 151K(1A)),

(c) the customer mentioned in section 151K(1) or subsection (1) of this section is to make payments to the financier amounting in aggregate to so much of the payments mentioned in section 151K(1)(c) or subsection (1)(d) of this section as are yet to be paid (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)),

(d) that customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments,

(e) that customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise),

(f) the customer has the exclusive right to occupy or otherwise to use the asset, and

(g) the customer is exclusively entitled to any income, profit or gain arising from or attributable to that asset (including, in particular, an increase in its value).

(3) For the purposes of subsections (1)(a) and (b) and (2)(a) it does not matter if—

(a) another person who is not the customer or the financier also has a beneficial interest in the asset, or

(b) the financier also has a legal interest in it.

(4) Subsection (1)(g) or (2)(f) does not prevent the customer from granting an interest or right in relation to the asset if the conditions in subsection (5) are met.

(5) The conditions are that—

(a) the grant is not to—

(i) the financier,

(ii) a person controlled by the financier, or

(iii) a person controlled by a person who also controls the financier, and

(b) the grant is not required by the financier or arrangements to which the financier is a party.

(6) Subsection (1)(h) or (2)(g) does not prevent the financier from—

(a) having responsibility for any reduction in the asset’s value, or

(b) having a share in a loss arising out of any such reduction.

(7) Section 1124 of CTA 2010 (meaning of “control”) applies for the purposes of this section.

(8) This section is subject to section 151O (provision not at arm’s length: exclusion of arrangements from sections 151J and 151K, this section and sections 151L to 151N).

Deposit arrangements

151L

(1) This section applies to arrangements if under them—

(a) a person (“the depositor”) deposits money with a financial institution,

(b) the money, together with money deposited with the institution by other persons, is used by it with a view to producing a profit,

(c) from time to time the institution makes or credits a payment to the depositor out of profit resulting from the use of the money,

(d) the payment is in proportion to the amount deposited by the depositor, and

(e) the payments so made or credited by the institution equate, in substance, to the return on an investment of money at interest.

(2) This section is subject to section 151O (provision not at arm's length: exclusion of arrangements from sections 151J, 151K, this section and sections 151M and 151N).

151M

(1) This section applies to arrangements if under them—

(a) a person (“the principal”) appoints an agent,

(b) one or both of the principal and agent is a financial institution,

(d) the principal is entitled, to a specified extent, to profits resulting from the use of the money,

(e) the agent is entitled to any additional profits resulting from its use (and may also be entitled to a fee paid by the principal), and

(f) payments made because of the principal's entitlement to profits equate, in substance, to the return on an investment of money at interest.

(2) This section is subject to section 151O (provision not at arm's length: exclusion of arrangements from sections 151J to 151L, this section and section 151N).

Investment bond arrangements

151N

(1) This section applies to arrangements if—

(a) they provide for one person (“the bond-holder”) to pay a sum of money (“the capital”) to another (“the bond-issuer”),

(b) they identify assets, or a class of assets, which the bond-issuer will acquire for the purpose of generating income or gains directly or indirectly (“the bond assets”),

(d) the bond-issuer undertakes under the arrangements—

(i) to dispose at the end of the bond term of any bond assets which are still in the bond-issuer's possession,

(ii) to make a repayment of the capital (“the redemption payment”) to the bond-holder during or at the end of the bond-term (whether or not in instalments), and

(iii) to pay to the bond-holder other payments on one or more occasions during or at the end of the bond term (“additional payments”),

(e) the amount of the additional payments does not exceed an amount which would be a reasonable commercial return on a loan of the capital,

(f) under the arrangements the bond-issuer undertakes to arrange for the management of the bond assets with a view to generating income sufficient to pay the redemption payment and additional payments,

(g) the bond-holder is able to transfer the rights under the arrangements to another person (who becomes the bond-holder because of the transfer),

(h) the arrangements are a listed security on a recognised stock exchange or admitted to trading on a multilateral trading facility operated by a regulated recognised stock exchange, and

(i) the arrangements are wholly or partly treated in accordance with international accounting standards as a financial liability of the bond-issuer, or would be if the bond-issuer applied those standards.

(2) For the purposes of subsection (1)—

(a) the bond-issuer may acquire bond assets before or after the arrangements take effect,

(b) the bond assets may be property of any kind, including rights in relation to property owned by someone other than the bond-issuer,

(c) the identification of the bond assets mentioned in subsection (1)(b) and the undertakings mentioned in subsection (1)(d) and (f) may (but need not) be described as, or accompanied by a document described as, a declaration of trust,

(d) a reference to the management of assets includes a reference to disposal,

(e) the bond-holder may (but need not) be entitled under the arrangements to terminate them, or participate in terminating them, before the end of the bond term,

(f) the amount of the additional payments may be—

(i) fixed at the beginning of the bond term,

(ii) determined wholly or partly by reference to the value of or income generated by the bond assets, or

(iii) determined in some other way,

(g) if the amount of the additional payments is not fixed at the beginning of the bond term, the reference in subsection (1)(e) to the amount of the additional payments is a reference to the maximum amount of the additional payments,

(h) the amount of the redemption payment may (but need not) be subject to reduction in the event of a fall in the value of the bond assets or in the rate of income generated by them, ... and

(i) entitlement to the redemption payment may (but need not) be capable of being satisfied (whether or not at the option of the bond-issuer or the bond-holder) by the issue or transfer of shares or other securities,

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

(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A) In subsection (1)—

“regulated recognised stock exchange” means a recognised stock exchange that is regulated in the United Kingdom, the European Economic Area or Gibraltar;

“multilateral trading facility” means—a UK multilateral trading facility within the meaning given by Article 2.1(14A) of Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments,an EU multilateral trading facility within the meaning given by Article 2.1(14B) of that Regulation, and a Gibraltar multilateral trading facility within the meaning given by Article 26(11)(b)(ii) of that Regulation. ...

(3) This section is subject to section 151O (provision not at arm's length: exclusion of arrangements from sections 151J to 151M and this section).

Provision not at arm's length: exclusion of arrangements from sections 151J to 151N

151O

(1) Arrangements to which this section applies are not—

(a) purchase and resale arrangements,

(b) diminishing shared ownership arrangements,

(d) profit share agency arrangements, or

(e) investment bond arrangements.

(2) This section applies to arrangements if—

(a) apart from this section they would be alternative finance arrangements,

(b) subsection (3) or (5) of section 147 of TIOPA 2010 (tax calculations to be based on arm's length, not actual, provision) requires the profits and losses of a person who is a party to the arrangements to be calculated for tax purposes as if the arm's length provision (within the meaning of that section) had been made or imposed rather than in accordance with the arrangements,

(i) relevant return in relation to the arrangements, or

(ii) an amount representing relevant return in relation to them, and

(d) the affected person is not subject—

(i) to income tax or corporation tax, or

(ii) to any corresponding tax under the law of a territory outside the United Kingdom,

on the relevant return or the amount representing it.

(3) In this section “relevant return”, in relation to arrangements, means any amount which would be alternative finance return if the arrangements were alternative finance arrangements.

Meaning of “alternative finance return”

Purchase and resale arrangements

151P

(1) In the case of purchase and resale arrangements, so much of the second purchase price as is specified under the following provisions of this section is alternative finance return for the purposes of this Chapter.

(2) If under the arrangements the whole of the second purchase price is paid on one day, the alternative finance return equals the amount by which the second purchase price exceeds the first purchase price.

(3) If under the arrangements the second purchase price is paid by instalments, the alternative finance return in each instalment equals the appropriate amount.

(4) The appropriate amount is an amount equal to the interest which would have been included in the instalment on the assumptions in subsection (5).

(5) The assumptions are that—

(a) interest is payable on a loan by the first purchaser to the second purchaser of an amount equal to the first purchase price,

(b) the total interest payable on the loan is equal to the amount by which the second purchase price exceeds the first purchase price,

(d) the loan is made on arm's length terms and accounted for under generally accepted accounting practice.

(6) In this section expressions used in section 151J have the same meaning as in that section.

Purchase and resale arrangements where return in foreign currency

151Q

(1) If, in the case of purchase and resale arrangements, alternative finance return is paid in a currency other than sterling—

(a) by or to a person other than a company, and

(b) otherwise than for the purposes of a trade, profession or vocation or a property business,

subsections (2) and (3) apply as respects that person.

(2) The amount of the excess referred to in section 151P(2) and (5)(b) and the appropriate amount for the purposes of section 151P(3) and (4) are to be calculated in that other currency.

(3) The amount of each payment of alternative finance return is to be translated into sterling at a spot rate of exchange for the day on which the payment is made.

Diminishing shared ownership arrangements

151R

(1) In the case of diminishing shared ownership arrangements, payments by the customer under the arrangements are alternative finance return for the purposes of this Chapter, except so far as subsection (2) or (3) applies to them.

(2) This subsection applies to the payments so far as they amount to payments of the kind described in section 151K(1)(c) or 151KA(1)(d) or (2)(c) (payments to be made by the customer to the financier, amounting to the consideration paid for the acquisition of the financier’s beneficial interest).

(3) This subsection applies to the payments so far as they amount to payments in respect of any arrangement fee or legal or other expenses which the customer is required under the arrangements to pay.

(4) In this section “the customer” has the same meaning as in section 151K or 151KA.

Other arrangements

151S

(1) In the case of deposit arrangements, amounts paid or credited as mentioned in section 151L(1)(c) by a financial institution under the arrangements (payments to depositor out of profits resulting from use of money) are alternative finance return for the purposes of this Chapter.

(2) In the case of profit share agency arrangements, amounts paid or credited by a financial institution in accordance with such an entitlement as is mentioned in section 151M(1)(d) (principal's entitlement to profits under the arrangements) are alternative finance return for the purposes of this Chapter.

(3) In the case of investment bond arrangements, the additional payments under the arrangements are alternative finance return for the purposes of this Chapter.

(4) In this section “additional payments” has the same meaning as in section 151N (see subsection (1)(d)(iii) of that section).

Special rules for investment bond arrangements

Investment bond arrangements are qualifying corporate bonds

151T

(1) For the purposes of section 117, investment bond arrangements are a corporate bond, issued on the date on which the arrangements are entered into, if each of conditions A to D is met.

(2) Condition A is that the capital is expressed in sterling.

(3) Condition B is that the arrangements do not include provision for the redemption payment to be in a currency other than sterling.

(4) Condition C is that entitlement to the redemption payment is not capable of conversion (directly or indirectly) into an entitlement to the issue of securities apart from other arrangements to which section 151N applies.

(5) Condition D is that the additional payments are not determined wholly or partly by reference to the value of the bond assets.

(6) Section 117(2) applies for the purposes of this section as it applies for the purposes of section 117(1).

(7) Expressions used in this section have the same meaning as in section 151N.

Treatment of bond-holder and bond-issuer

151U

(1) This section applies for the purposes of this Act and any other enactment about capital gains tax and irrespective of the position for other purposes.

(2) The bond-holder under investment bond arrangements is not treated as having a legal or beneficial interest in the bond assets.

(3) The bond-issuer under such arrangements is not treated as a trustee of the bond assets.

(4) Gains accruing to the bond-issuer in connection with the bond assets are gains of the bond-issuer and not of the bond-holder (and do not arise to the bond-issuer in a fiduciary or representative capacity).

(5) Payments made by the bond-issuer by way of redemption payment or additional payment are not made in a fiduciary or representative capacity.

(6) The bond-holder is not entitled to relief for capital expenditure in connection with the bond assets.

(7) Expressions used in this section have the same meaning as in section 151N.

Treatment as securities

151V

(1) Investment bond arrangements are securities for the purposes of this Act and any other enactment about capital gains tax.

(2) For those purposes—

(a) a reference in an enactment to redemption is to be taken as a reference to making the redemption payment, and

(b) a reference in an enactment to interest is to be taken as a reference to alternative finance return.

(3) In subsection (2) “the redemption payment” has the same meaning as in section 151N (see subsection (1)(d)(ii) of that section).

Investment bond arrangements not unit trust scheme or offshore fund

151W

Investment bond arrangements are not—

(a) a unit trust scheme for the purposes of this Act, or

(b) an offshore fund for the purposes of section 354 of TIOPA 2010 so far as relating to capital gains tax.

Other rules

Exclusion of some alternative finance return from sale consideration

151X

(1) If under purchase and resale arrangements an asset is sold by one party to the arrangements to the other party, the alternative finance return is excluded in determining the consideration for the sale and purchase of the asset for the purposes of this Act so far as it applies for capital gains tax (apart from section 151J).

(2) If under diminishing shared ownership arrangements an asset is sold by one party to the arrangements to the other party, the alternative finance return is excluded in determining the consideration for the sale and purchase of the asset for the purposes of this Act so far as it applies for capital gains tax (apart from section 151K or 151KA).

(3) If under investment bond arrangements an asset is sold by one party to the arrangements to the other party, the alternative finance return is excluded in determining the consideration for the sale and purchase of the asset for the purposes of this Act so far as it applies for capital gains tax (apart from section 151N).

(4) Subsections (1) to (3) do not affect the operation of any provision of this Act or the Tax Acts that provides that the consideration for a sale or purchase is taken for any purpose to be an amount other than the actual consideration.

Diminishing shared ownership arrangements : further provision

151Y

(1) Diminishing shared ownership arrangements are not treated as a partnership for capital gains tax purposes.

(2) If, under diminishing shared ownership arrangements, the financier grants a lease of the asset to the customer, the grant or termination of the lease is not to be treated as a disposal or acquisition of part of the asset for the purposes of this Act so far as it applies for capital gains tax.

(3) If, under diminishing shared ownership arrangements, the financier is entitled to the asset as a result of the customer breaching an obligation under the arrangements—

(a) the financier’s dealings with the asset for the purpose of enforcing or giving effect to the entitlement, and

(b) the dealings with the asset of any person appointed for that purpose,

are to be treated for the purposes of this Act so far as it applies for capital gains tax as if they were done through the financier, or (as the case may be) the appointed person, as nominee by the customer.

(4) In this section—

“the asset” means the asset in which beneficial interest is acquired and disposed of under the diminishing shared ownership arrangements;

“the customer” and “the financier” have the same meaning as in section 151K or 151KA;

“termination”, in relation to a lease, has the meaning given by section 70YI of CAA 2001.

Diminishing shared ownership arrangements: further provision in respect of refinancing

151Z

(1) This section applies in respect of diminishing shared ownership arrangements to which section 151KA applies.

(2) If, under the arrangements, the customer disposes of an asset as mentioned in section 151KA (1)(b), any gain accruing to the customer on the disposal of the asset is to be treated as not having accrued for the purposes of this Act so far as it applies for capital gains tax.

(3) If, under the arrangements, the customer—

(a) disposes of an asset as mentioned in section 151KA (1)(b),

(b) acquires the asset as mentioned in section 151KA (1)(d) and (e) or (2)(c) and (d),

the disposal of the asset mentioned in paragraph (a) and the acquisition of the asset mentioned in paragraph (b) (together with any intervening disposals or acquisitions of the asset) are to be treated as not having occurred for the purpose of computing, for the purposes of this Act so far as it applies for capital gains tax, the amount of the gain accruing to the customer on the subsequent disposal of the asset.

(4) In subsections (2) and (3),”the customer” has the same meaning as in section 151KA.

(5) If, under arrangements to which section 151KA (2) applies (“successor arrangements”), the financier under the diminishing shared ownership arrangements that the successor arrangements supersede transfers their interest in a lease forming part of those arrangements to the financier under the successor arrangements, the transfer is not to be treated as involving a disposal or acquisition of the interest for the purposes of this Act so far as it applies for capital gains tax.

Part V — Transfer of business assets, business asset disposal relief and investors' relief

Chapter I — Transfer of business assets: General provisions

Replacement of business assets

Roll-over relief.

152

(1) If the consideration which a person carrying on a trade obtains for the disposal of, or of his interest in, assets (“the old assets”) used, and used only, for the purposes of the trade throughout the period of ownership is applied by him in acquiring other assets, or an interest in other assets (“the new assets”) which on the acquisition are taken into use, and used only, for the purposes of the trade, and the old assets and new assets are within the classes of assets listed in section 155, then the person carrying on the trade shall, on making a claim as respects the consideration which has been so applied, be treated for the purposes of this Act—

(a) as if the consideration for the disposal of, or of the interest in, the old assets were (if otherwise of a greater amount or value) of such amount as would secure that on the disposal neither a gain nor a loss accrues to him, and

(b) as if the amount or value of the consideration for the acquisition of, or of the interest in, the new assets were reduced by the excess of the amount or value of the actual consideration for the disposal of, or of the interest in, the old assets over the amount of the consideration which he is treated as receiving under paragraph (a) above,

but neither paragraph (a) nor paragraph (b) above shall affect the treatment for the purposes of this Act of the other party to the transaction involving the old assets, or of the other party to the transaction involving the new assets.

(2) Where subsection (1)(a) above applies to exclude a gain which, in consequence of Schedule 2, is not all chargeable gain, the amount of the reduction to be made under subsection (1)(b) above shall be the amount of the chargeable gain, and not the whole amount of the gain.

(3) Subject to subsection (4) below, this section shall only apply if the acquisition of, or of the interest in, the new assets takes place, or an unconditional contract for the acquisition is entered into, in the period beginning 12 months before and ending 3 years after the disposal of, or of the interest in, the old assets, or at such earlier or later time as the Board may by notice allow.

(4) Where an unconditional contract for the acquisition is so entered into, this section may be applied on a provisional basis without waiting to ascertain whether the new assets, or the interest in the new assets, is acquired in pursuance of the contract, and, when that fact is ascertained, all necessary adjustments shall be made by making or amending assessments or by repayment or discharge of tax, and shall be so made notwithstanding any limitation on the time within which assessments or amendments may be made.

(5) This section shall not apply unless the acquisition of, or of the interest in, the new assets was made for the purpose of their use in the trade, and not wholly or partly for the purpose of realising a gain from the disposal of, or of the interest in, the new assets.

(6) If, over the period of ownership or any substantial part of the period of ownership, part of a building or structure is, and part is not, used for the purposes of a trade, this section shall apply as if the part so used, with any land occupied for purposes ancillary to the occupation and use of that part of the building or structure, were a separate asset, and subject to any necessary apportionments of consideration for an acquisition or disposal of, or of an interest in, the building or structure and other land.

(7) If the old assets were not used for the purposes of the trade throughout the period of ownership this section shall apply as if a part of the asset representing its use for the purposes of the trade having regard to the time and extent to which it was, and was not, used for those purposes, were a separate asset which had been wholly used for the purposes of the trade, and this subsection shall apply in relation to that part subject to any necessary apportionment of consideration for an acquisition or disposal of, or of the interest in, the asset.

(8) This section shall apply in relation to a person who, either successively or at the same time, carries on 2 or more trades as if both or all of them were a single trade.

(9) In this section “period of ownership” does not include any period before 31st March 1982.

(10) The provisions of this Act fixing the amount of the consideration deemed to be given for the acquisition or disposal of assets shall be applied before this section is applied.

(11) Without prejudice to section 52(4), where consideration is given for the acquisition or disposal of assets some or part of which are assets in relation to which a claim under this section applies, and some or part of which are not, the consideration shall be apportioned in such manner as is just and reasonable.

Assets only partly replaced.

153

(1) Section 152(1) shall not apply if part only of the amount or value of the consideration for the disposal of, or of the interest in, the old assets is applied as described in that subsection, but if all of the amount or value of the consideration except for a part which is less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal of, or of the interest in, the old assets is so applied, then the person carrying on the trade, on making a claim as respects the consideration which has been so applied, shall be treated for the purposes of this Act—

(a) as if the amount of the gain so accruing were reduced to the amount of the said part (and, if not all chargeable gain, with a proportionate reduction in the amount of the chargeable gain), and

(b) as if the amount or value of the consideration for the acquisition of, or of the interest in, the new assets were reduced by the amount by which the gain is reduced (or as the case may be the amount by which the chargeable gain is proportionately reduced) under paragraph (a) of this subsection,

(2) Subsections (3) to (11) of 152 shall apply as if this section formed part of that section.

Provisional application of sections 152 and 153.

153A

(1) This section applies where a person carrying on a trade who for a consideration disposes of, or of his interest in, any assets (“the old assets”) declares, in his return for the chargeable period in which the disposal takes place—

(a) that the whole or any specified part of the consideration will be applied in the acquisition of, or of an interest in, other assets (“the new assets”) which on the acquisition will be taken into use, and used only, for the purposes of the trade;

(b) that the acquisition will take place as mentioned in subsection (3) of section 152; and

(2) Until the declaration ceases to have effect, section 152 or, as the case may be, section 153 shall apply as if the acquisition had taken place and the person had made a claim under that section.

(3) The declaration shall cease to have effect as follows—

(a) if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim made under section 152 or 153, on the day on which it is so withdrawn or superseded; and

(b) if and to the extent that it is not so withdrawn or superseded, on the relevant day.

(4) On the declaration ceasing to have effect in whole or in part, all necessary adjustments—

(a) shall be made by making or amending assessments or by repayment or discharge of tax; and

(b) shall be so made notwithstanding any limitation on the time within which assessments or amendments may be made.

(5) In this section “the relevant day” means—

(a) in relation to capital gains tax, the third anniversary of the 31st January next following the year of assessment in which the disposal of, or of the interest in, the old assets took place;

(b) in relation to corporation tax, the fourth anniversary of the last day of the accounting period in which that disposal took place.

(6) Subsections (6), (8), (10) and (11) of section 152 shall apply for the purposes of this section as they apply for the purposes of that section.

New assets which are depreciating assets.

154

(1) Sections 152, 153 and 229 shall have effect subject to the provisions of this section in which—

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Taxation of Chargeable Gains Act 1992

Seed enterprise investment scheme: reduction of relief

150F

Seed enterprise investment scheme: re-investment

150G

Personal equity plans.

151

Venture capital trusts: reliefs.

151A

Venture capital trusts: supplementary.

151B

CITR: identification of securities or shares on a disposal

151BA

CITR: rights issues etc

151BB

CITR: company reconstructions etc

151BC

Strips: manipulation of price: associated payment giving rise to loss

151C

Corporate strips: manipulation of price: associated payment giving rise to loss

151D

Exchange gains and losses from loan relationships: regulations

151E

Treatment of alternative finance arrangements

151F

Regulations where non-qualifying shares conditions altered

151G

Chapter 4 — Alternative finance arrangements

Introduction

Introduction

151H

Meaning of “financial institution”

151I

Arrangements that are alternative finance arrangements

Purchase and resale arrangements

151J

Diminishing shared ownership arrangements : initial acquisition

151K

Diminishing shared ownership arrangements: refinancing

151KA

Deposit arrangements

151L

Profit share agency arrangements

151M

Investment bond arrangements

151N

Provision not at arm's length: exclusion of arrangements from sections 151J to 151N

151O

Meaning of “alternative finance return”

Purchase and resale arrangements

151P

Purchase and resale arrangements where return in foreign currency

151Q

Diminishing shared ownership arrangements

151R

Other arrangements

151S

Special rules for investment bond arrangements

Investment bond arrangements are qualifying corporate bonds

151T

Treatment of bond-holder and bond-issuer

151U

Treatment as securities

151V

Investment bond arrangements not unit trust scheme or offshore fund

151W

Other rules

Exclusion of some alternative finance return from sale consideration

151X

Diminishing shared ownership arrangements : further provision

151Y

Diminishing shared ownership arrangements: further provision in respect of refinancing

151Z

Part V — Transfer of business assets, business asset disposal relief and investors' relief

Chapter I — Transfer of business assets: General provisions

Replacement of business assets

Roll-over relief.

152

Assets only partly replaced.

153