Link Report

(2) Where at the beginning of the period of ownership of a lease of land it is subject to a sub-lease not at a rent representing the full value of the land together with any buildings on the land, and the value of the lease at the end of the duration of the sub-lease, estimated as at the beginning of the period of ownership, exceeds the expenditure allowable under section 552(1)(a) in computing the gain accruing on a disposal of the lease, the lease shall not be a wasting asset until the end of the duration of the sub-lease.

(b) the percentage so derived for the duration of the lease at the time when any item of expenditure attributable to the lease under section 552(1)(b) is first reflected in the nature of the lease is P (2), and

(i) there shall be excluded from the expenditure attributable to the lease under section 552(1)(a) a fraction equal to—

(ii) there shall be excluded from any item of expenditure attributable to the lease under section 552(1)(b) a fraction equal to—

(ii) that consideration were expenditure incurred by the sub-lessee and attributable to that part of the sub-lease under section 552(1)(b).

(2) In the computation under Chapter 2 of Part 19 of the gain accruing on the part disposal of a lease by means of the grant of a sub-lease for a premium (in this paragraph referred to as “the actual premium”), the expenditure attributable to the lease under paragraphs (a) and (b) of section 552(1) shall be apportioned in accordance with this paragraph, and section 557 shall not apply.

(3) Out of each item of the expenditure attributable to the lease under paragraphs (a) and (b) of section 552(1) there shall be apportioned to the part disposal—

(4) Where the sub-lease is a sub-lease of only part of the land comprised in the lease, this paragraph shall apply only in relation to a proportion of the expenditure attributable to the lease under paragraphs (a) and (b) of section 552(1) which is the same as the proportion which the value of the land comprised in the sub-lease at the time when the sub-lease is granted bears to the value of that land and the other land comprised in the lease at that time, and the remainder of that expenditure shall be apportioned to the other land.

8. If under section 98(2) income tax is chargeable on any amount as being a premium the payment of which is deemed to be required by the lease, the person so chargeable shall be treated for the purposes of the computation of any gain accruing to that person on the disposal by means of the grant of the lease, and on any subsequent disposal of the asset out of which the lease was granted, as having incurred at the time the lease was granted expenditure of that amount (in addition to any other expenditure) attributable to the asset under section 552(1)(b).

(10) Where a gain chargeable to tax under subsection (2) or (6) is realised by the exercise of a right, section 552 shall apply as if a sum equal to the amount of the gain so chargeable to tax formed part of the consideration given by the person acquiring the shares for their acquisition by that person.

(14) Where a person is charged to tax under this section on a chargeable amount computed in accordance with subsection (8), then section 552 shall apply as if a sum equal to the amount so charged formed part of the consideration given by the person acquiring securities for their acquisition by that person.

(6) Where this section applies and a charge to income tax an amount chargeable to income tax on the acquisition of shares by a director or employee is, for the purposes of section 552, to be treated as forming part of the consideration given by the director or employee for the acquisition of the shares, then the amount of the income tax charge the amount chargeable to income tax to be so treated shall be the amount as reduced in accordance with subsection (4), together with any additional amount charged as a consequence of an adjustment made in accordance with subsection (5).

(3) The amount of the credit return shall not be regarded as expenditure on an asset for the purpose of section 552.

(7) Any amount in respect of which relief is allowed under subsection (2) and not withdrawn shall be treated as a sum which by virtue of section 554 is to be excluded from the sums allowable under section 552.

(b) Paragraph (a) shall not apply to cases within subparagraph (ii) of that paragraph if immediately before the receipt of the capital sum there is no expenditure attributable to the asset under paragraphs (a) and (b) of section 552(1) or if the consideration for the part disposal deemed to be effected on receipt of the capital sum exceeds that expenditure.

(a) no sum shall, notwithstanding section 547 or 552, be allowed as a deduction from the consideration for the disposal apart from incidental costs to the person or company making the disposal, and

(a) a company incurs expenditure on the construction of any building, structure or works, being expenditure allowable as a deduction under section 552 in computing a gain accruing to the company on the disposal of the building, structure or works, or of any asset comprising the building, structure or works,

then, the sums so allowable shall, notwithstanding section 552(3)(b), include the amount of that interest charged to capital.

(1) There shall be excluded from the sums allowable under section 552 as a deduction any expenditure allowable as a deduction in computing the profits or gains or losses of a trade or profession for the purposes of income tax or allowable as a deduction in computing any other income or profits or gains or losses for the purposes of the Income Tax Acts and any expenditure which, although not so allowable as a deduction in computing any losses, would be so allowable but for an insufficiency of income or profits or gains, and this subsection shall apply irrespective of whether effect is or would be given to the deduction in computing the amount of tax chargeable or by discharge or repayment of tax or in any other way.

(2) Without prejudice to subsection (1), there shall be excluded from the sums allowable under section 552 as a deduction any expenditure which, if the assets or all the assets to which the computation relates were, and had at all times been, held or used as part of the fixed capital of a trade the profits or gains of which were chargeable to income tax, would be allowable as a deduction in computing the profits or gains or losses of the trade for the purposes of the Income Tax Acts.

(1) Section 554 shall not require the exclusion from the sums allowable as a deduction under section 552 of any expenditure as being expenditure in respect of which a capital allowance or renewals allowance is made but, in the computation of the amount of a loss accruing to the person making the disposal, there shall be excluded from the sums allowable as a deduction any expenditure to the extent to which any capital allowance or renewals allowance has been or may be made in respect of that expenditure.

(2)(a) For the purposes of computing the chargeable gain accruing to a person on the disposal of an asset, each sum (in this section referred to as “deductible expenditure”) allowable as a deduction from the consideration for the disposal under paragraphs (a) and (b) of section 552(1) shall be adjusted by multiplying it by the figure (in this section referred to as “the multiplier”) specified in subsection (5) or determined under subsection (6), as the case may be. specified in subsection (5), determined under subsection (6) or specified in subsection (6A), as the case may be.

(1) Where a person disposes of an interest or rights in or over an asset and, generally wherever on the disposal of an asset, any description of property derived from that asset remains undisposed of, the sums which under paragraphs (a) and (b) of section 552(1) are attributable to the asset shall be apportioned both for the purposes of the computation under this Chapter of the gain accruing on the disposal and for the purpose of applying this Chapter in relation to the property which remains undisposed of.

(3) Any apportionment to be made in pursuance of this section shall be made before the operation of section 555 and, if after a part disposal there is a subsequent disposal of an asset, the capital allowances or renewals allowances to be taken into account in pursuance of that section in relation to the subsequent disposal shall, subject to subsection (4), be those referable to the sums which under paragraphs (a) and (b) of section 552(1) are attributable to the asset whether before or after the part disposal, but those allowances shall be reduced by the amount (if any) by which the loss on the earlier disposal was restricted under that section.

(1) If and in so far as, in a case where assets have been merged or divided or have changed their nature, or rights or interests in or over assets have been created or extinguished, the value of an asset is derived from any other asset in the same ownership, an appropriate proportion of the sums allowable as a deduction in respect of the other asset under paragraphs (a) and (b) of section 552(1) shall, both for the purpose of the computation of a gain accruing on the disposal of the first-mentioned asset and, if the other asset remains in existence, on a disposal of that other asset, be attributed to the first-mentioned asset.

(a) that any expenditure attributable to the asset under section 552(1)(a), after deducting the residual or scrap value, if any, of the asset, is written off at a uniform rate from its full amount at the time when the asset is acquired or provided to nil at the end of its life, and

(b) that any expenditure attributable to the asset under section 552(1)(b) is written off at a uniform rate from the full amount of that expenditure at the time when that expenditure is first reflected in the state or nature of the asset to nil at the end of its life.

(4) Where any expenditure attributable to the asset under section 552(1)(b) creates or increases a residual or scrap value of the asset, the residual or scrap value to be deducted under subsection (3)(a) shall be the residual or scrap value so created or increased.

(5) Any expenditure written off under this section shall not be allowable as a deduction under section 552.

(a) which, from the beginning of the period of ownership of the person making the disposal to the time when the disposal is made, is used solely for the purposes of a trade or profession and in respect of which that person has claimed or could have claimed any capital allowance in respect of any expenditure attributable to the asset under paragraph (a) or (b) of section 552(1), or

(a) the consideration for the disposal and any expenditure attributable to the asset under paragraph (a) or (b) of section 552(1) shall be apportioned by reference to the extent to which that expenditure qualified for capital allowances,

(1) No allowance shall be made under section 552—

(b)as if any expenditure of the kind referred to in paragraph (b) of section 552(1) that was incurred on the assets during the life interest period by the trustee had been incurred by the person.

(ii) it shall be assumed that, on each occasion before the 6th day of April, 1978, on which a disposal was made of shares in the holding, each of the distinguishable parts of the holding as it existed immediately before the disposal was reduced, both as regards the number of shares comprised in that part and the expenditure attributable to that part under paragraphs (a) and (b) of section 552(1), in the same proportion as the number of shares so disposed of bears to the number of shares comprised in the holding immediately before that disposal, and

(iii) the number of shares comprised in each such part on the 6th day of April, 1978, and the expenditure attributable (apart from section 556) to that part under paragraphs (a) and (b) of section 552(1) shall, in relation to a disposal made on or after that date, be the number and expenditure respectively determined in accordance with this subsection.

(4) Where in connection with the arrangement shares in the successor company are issued to a member of the assurance company concerned, and such shares are treated under section 587 as having been exchanged by the member for the interest in the company possessed by the member, those shares shall, notwithstanding section 584, be regarded for the purposes of section 552(1)—

(2) For the purposes of the computation of a chargeable gain accruing on the disposal of any of those shares by the person owning them on the date of transfer, an amount equal to the amount so apportioned to that share shall be excluded from the expenditure allowable as a deduction under section 552(1)(a) from the consideration for the disposal.

(i) there shall be excluded from the sums allowable under section 552 so much of any payment made by the insured company under the reinsurance contract as is paid in respect of an entitlement to a payment on the death, disablement or disease of a person, or one of a class of persons, and

(b) the sums allowable as a deduction under section 552(1)(a) shall be reduced by the amount apportioned to the new asset under paragraph (a),

(5)(a) In this subsection, “the cost of the new assets” means any sums which would be allowable as a deduction under section 552(1)(a) if the new assets were disposed of as a whole in circumstances giving rise to a chargeable gain.

(a) from the beginning of the period of ownership of the person making the disposal to the time when the disposal is made, the asset has been used and used solely for the purposes of a trade or profession and that person has claimed or could have claimed any capital allowance in respect of any expenditure attributable to the asset or interest under paragraph (a) or (b) of section 552(1), or

(a) the consideration for the disposal and any expenditure attributable to the asset or interest under paragraph (a) or (b) of section 552(1) shall be apportioned by reference to the extent to which that expenditure qualified for capital allowances,

(e) the incidental costs (within the meaning of section 552(2)) relating to the acquisition, sale or exchange of the qualifying land referred to in paragraphs (b), (c) and (d).

section 547 shall not apply but, if the disposal is for no consideration or for a consideration not exceeding the sums which would be allowable as a deduction under sections 552 and 828(4) for the purposes of computing a chargeable gain, then—

(b) the sums allowable as a deduction under section 552(1)(a) shall be reduced by the amount apportioned to the new asset under paragraph (a),

“relevant cost” means the amount which would be allowable as a deduction for the purposes of the Capital Gains Tax Acts under section 552 subject to the modification that references in subsection (3) of that section to “borrowed money” shall be read as if they were references only to borrowed money that is third-party debt;

(a) where subsection (3) applies, an amount shall be allowable as a deduction under section 552(1)(a) from the consideration for the disposal, being an amount determined by the formula—

(b) where subsection (3) does not apply, an amount shall be allowable as a deduction under section 552(1)(a) from the consideration for the disposal, being an amount determined by the formula—