|
| |
|
2D | “The threshold amount” |
| |
(1) | This section applies to determine “the threshold amount” in relation |
| |
to a disposal which meets Conditions A to C in section 2C (“the |
| |
| |
| 5 |
(a) | the current disposal is not a part disposal of an asset, and |
| |
(b) | P has not made any relevant related disposals, |
| |
| the threshold amount is £2 million, subject to subsection (5) (joint |
| |
| |
(3) | If paragraphs (a) and (b) of subsection (2) do not both apply, the |
| 10 |
threshold amount is the relevant fraction of £2 million, subject to |
| |
subsection (5) (joint interests). |
| |
(4) | “The relevant fraction” is—![equation: over[char[C],times[char[T],char[M],char[V]]]](missing.gif) |
| |
| |
| “C” is the amount or value of the consideration for the current |
| 15 |
| |
| “TMV” is what would be the market value, at the time of the |
| |
current disposal, of a notional asset comprising— |
| |
(a) | the disposed of interest (see section 2C(2)), |
| |
(b) | if the current disposal is a part disposal, any part of |
| 20 |
the chargeable interest held by P that remains |
| |
undisposed of immediately following that part |
| |
| |
(c) | any chargeable interest (or part of a chargeable |
| |
interest) which was the subject of a relevant related |
| 25 |
| |
(d) | any chargeable interest (or part of a chargeable |
| |
interest) held by P at the time of the current disposal |
| |
which, if P had disposed of it at that time, would have |
| |
been the subject of a relevant related disposal. |
| 30 |
(5) | If the disposed of interest is a share of the whole of— |
| |
(a) | a chargeable interest, or |
| |
(b) | a part of a chargeable interest, |
| |
| subsections (2) and (3) have effect as if the references to “£2 million” |
| |
were to the joint share fraction of that amount. |
| 35 |
(6) | The joint share fraction is the fraction of the whole of the chargeable |
| |
interest or part represented by the disposed of interest. |
| |
(7) | “Relevant related disposal”, in relation to the current disposal, |
| |
means any disposal by P which— |
| |
(a) | meets Conditions A to C in section 2C in circumstances |
| 40 |
where the single-dwelling interest referred to in Condition C |
| |
| |
(i) | the single-dwelling interest by virtue of which |
| |
Condition C is met in relation to the current disposal, |
| |
| 45 |
|
| |
|
| |
|
(ii) | another single-dwelling interest in the same dwelling |
| |
| |
(b) | was made in the period of 6 years ending with the day on |
| |
which the current disposal occurs, but not before 6 April |
| |
| 5 |
| |
(1) | This section applies where (ignoring this section)— |
| |
(a) | a disposal would be a relevant high value disposal, but for a |
| |
failure to meet condition D in section 2C, |
| |
(b) | if it were a relevant high value disposal, an ATED-related |
| 10 |
loss would accrue to a person (other than an excluded |
| |
person) in a tax year on the disposal, and |
| |
(c) | the total of the sums allowable as a deduction under section |
| |
38 in relation to the disposal exceeds the threshold amount in |
| |
relation to the disposal. |
| 15 |
(2) | For the purposes of this Act— |
| |
(a) | the disposal is to be treated as a relevant high value disposal |
| |
(and section 57A and Schedule 4ZZA apply accordingly), and |
| |
(b) | the ATED-related loss which accrues on the disposal is to be |
| |
restricted to the amount which would have been that loss had |
| 20 |
the consideration for the disposal been £1 greater than the |
| |
threshold amount in relation to the disposal. |
| |
(3) | In a case where paragraph 2 of Schedule 4ZZA applies (calculation |
| |
of gains or losses on disposals of assets held on 5 April 2013), the |
| |
reference in subsection (1)(c) to the disposal is to be read as a |
| 25 |
reference to the notional disposal referred to in paragraph 3(2) of that |
| |
Schedule (disposal on which notional post-April 2013 gain or loss |
| |
| |
(4) | Nothing in subsection (2)(b) restricts any loss which is not ATED- |
| |
related, or affects any gain (whether or not ATED-related), accruing |
| 30 |
on the relevant high value disposal. |
| |
| |
“excluded” has the meaning given by section 2B(2); |
| |
“the threshold amount” has the meaning given by section 2D. |
| |
2F | Tapering relief for gains |
| 35 |
(1) | This section applies to an ATED-related gain which accrues on a |
| |
relevant high value disposal and is chargeable to capital gains tax by |
| |
| |
(2) | There is excluded from the gain so much of it as exceeds five-thirds |
| |
of the difference between— |
| 40 |
(a) | the amount or value of the consideration, and |
| |
(b) | the threshold amount (within the meaning of section 2D) in |
| |
relation to the disposal. |
| |
(3) | But where the relevant fraction is less than 1, subsection (2) has effect |
| |
as if the amount determined under that subsection were the relevant |
| 45 |
| |
|
| |
|
| |
|
(4) | “The relevant fraction”— |
| |
(a) | in a case where the ATED-related gain is determined in |
| |
accordance with paragraph 3 of Schedule 4ZZA, has the |
| |
meaning given by paragraph 3(4) of that Schedule, and |
| |
(b) | in a case where the ATED-related gain is determined in |
| 5 |
accordance with paragraph 6 of that Schedule, has the same |
| |
meaning as in paragraph 6(5)(a) of that Schedule. |
| |
(5) | Nothing in this section restricts any gain which is not ATED-related, |
| |
or affects any loss (whether or not ATED-related), accruing on the |
| |
relevant high value disposal.” |
| 10 |
5 | In section 4 (rates of capital gains tax), after subsection (3) insert— |
| |
“(3A) | The rate of capital gains tax in respect of gains chargeable under |
| |
section 2B accruing to a person in a tax year is 28%.” |
| |
6 | In section 8 (company’s total profits to include chargeable gains), after |
| |
| 15 |
“(4A) | Nothing in this section applies in relation to an ATED-related gain |
| |
chargeable to, or an ATED-related loss allowable for the purposes of, |
| |
capital gains tax by virtue of section 2B.” |
| |
7 | In section 13 (attribution of gains to members of non-resident companies), |
| |
after subsection (1) insert— |
| 20 |
“(1A) | But this section does not apply if the gain is an ATED-related gain |
| |
chargeable to capital gains tax by virtue of section 2B (capital gains |
| |
tax on ATED-related gains).” |
| |
8 | In section 16 (computation of losses), in subsection (3) after “section” insert |
| |
| 25 |
9 | In Part 2, after Chapter 4 insert— |
| |
| |
Computation of gains and losses: relevant high value disposals |
| |
57A | Gains and losses on relevant high value disposals |
| |
(1) | Schedule 4ZZA makes provision about the computation of gains and |
| 30 |
losses on relevant high value disposals, including provision about |
| |
whether a gain or loss is ATED-related or not. |
| |
(2) | But if the effect of Schedule 4ZZA applying in relation to a disposal |
| |
would be that no ATED-related gain or loss accrues on the disposal, |
| |
for the purposes of this Act the gain or loss on the disposal is to be |
| 35 |
computed ignoring that Schedule (and is not ATED-related).” |
| |
10 | After section 100 insert— |
| |
“100A | Exemption for certain EEA UCITS |
| |
(1) | ATED-related gains accruing on relevant high value disposals made |
| |
by an EEA UCITS which is not an open-ended investment company |
| 40 |
or a unit trust scheme are not chargeable gains under section 2B. |
| |
| |
|
| |
|
| |
|
“EEA UCITS” has the same meaning as in Part 17 of the |
| |
Financial Services and Markets Act 2000 (see section 237 of |
| |
| |
“unit trust scheme” has same meaning as in that Part (see |
| |
section 237(1) of that Act); |
| 5 |
“open-ended investment company” has the same meaning as in |
| |
that Part (see section 236(1) of that Act).” |
| |
11 (1) | Section 161 (appropriations to and from stock) is amended as follows. |
| |
(2) | In subsection (1) for “subsection (3)” substitute “subsections (3) to (3ZB)”. |
| |
(3) | After subsection (3) insert— |
| 10 |
“(3ZA) | But if the person— |
| |
(a) | meets the requirement of paragraph (a) or (b) of subsection |
| |
| |
(b) | (ignoring any election under this section) would be treated |
| |
under subsection (1) as making a relevant high value disposal |
| 15 |
on which an ATED-related gain chargeable to, or loss |
| |
allowable for the purposes of, capital gains tax under section |
| |
| |
| the person may not elect under subsection (3) but may elect for |
| |
subsection (3ZB) to apply. |
| 20 |
(3ZB) | Subject to subsection (4), where an election is made for this |
| |
| |
(a) | a gain or loss accruing on the disposal under subsection (1) |
| |
which is not ATED-related is not a chargeable gain or an |
| |
| 25 |
(b) | the market value of the asset at the time of the appropriation |
| |
is, for the purposes of computing the profits of the trade for |
| |
the purposes of tax, to be treated as reduced by the amount of |
| |
any gain, or increased by the amount of any loss, which |
| |
would be a chargeable gain or allowable loss but for |
| 30 |
| |
(c) | the chargeable gain or allowable loss which accrues on that |
| |
disposal and is ATED-related is unaffected by the election.” |
| |
(4) | In subsection (3A), after “subsection (3)” insert “or (3ZA)”. |
| |
(5) | In subsection (4), after “subsection (3)” insert “or (3ZA)”. |
| 35 |
12 | In section 171 (transfers within a group: general provisions), in subsection |
| |
(2), after paragraph (b) insert— |
| |
“(ba) | a relevant high value disposal on which (ignoring subsection |
| |
(1)) there accrues to company A an ATED-related gain |
| |
chargeable to, or an ATED-related loss allowable for the |
| 40 |
purposes of, capital gains tax by virtue of section 2B; or”. |
| |
13 | After section 187 insert— |
| |
“187A | Deemed disposal under section 185: ATED-related gains and losses |
| |
(1) | This section applies if— |
| |
|
| |
|
| |
|
(a) | (ignoring subsections (2) and (3)) a gain or loss would accrue |
| |
to a company on a disposal of an asset deemed to have been |
| |
made by virtue of section 185(2), and |
| |
(b) | that gain or loss is an ATED-related gain chargeable to, or an |
| |
ATED-related loss allowable for the purposes of, capital |
| 5 |
gains tax under section 2B. |
| |
(2) | That gain or loss does not accrue to the company on that disposal. |
| |
(3) | But, on a subsequent disposal of the whole or part of the asset, the |
| |
whole or a corresponding part of the gain or loss— |
| |
(a) | is deemed to accrue to the company (in addition to any gain |
| 10 |
or loss that actually accrues on that subsequent disposal), and |
| |
(b) | (if that would not otherwise be the case) is to be treated as an |
| |
ATED-related gain or loss accruing on a relevant high value |
| |
| |
(4) | Nothing in this section affects the treatment, for the purposes of this |
| 15 |
Act, of any gain or loss which is not ATED-related and accrues on the |
| |
disposal of the asset deemed to have been made by virtue of section |
| |
| |
14 | In section 271 (miscellaneous exemptions)— |
| |
(a) | in subsection (1A), after “registered pension scheme” insert “or an |
| 20 |
overseas pension scheme”, and |
| |
(b) | in subsection (10), for the words after “above” substitute “— |
| |
“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).” |
| 25 |
15 | In section 288 (interpretation), in subsection (1), at the appropriate places |
| |
| |
““ATED-related”, in relation to a gain or loss, is to be construed |
| |
in accordance with section 57A and Schedule 4ZZA;”; |
| |
““relevant high value disposal” has the meaning given by |
| 30 |
| |
16 | After Schedule 4 insert— |
| |
| |
relevant high value disposals: gains and losses |
| |
| 35 |
1 | This Schedule applies for the purposes of determining in relation |
| |
to a relevant high value disposal made by a person (“P”)— |
| |
(a) | whether a gain or loss which is ATED-related accrues to P |
| |
| |
(b) | whether a gain or loss which is not ATED-related accrues |
| 40 |
| |
Assets held on 5 April 2013: no paragraph 5 election |
| |
2 | If the interest disposed of was held by P on 5 April 2013— |
| |
|
| |
|
| |
|
(a) | paragraph 3 applies for the purposes of computing the |
| |
gain or loss accruing to P which is ATED-related, and |
| |
(b) | paragraph 4 applies for the purposes of computing the |
| |
gain or loss accruing to P which is not ATED-related. |
| |
3 (1) | An amount equal to the relevant fraction of the notional post-April |
| 5 |
2013 gain or loss is the ATED-related gain or loss (as the case may |
| |
| |
(2) | “Notional post-April 2013 gain or loss” means the gain or loss |
| |
which (in the absence of section 2B and this Schedule) would have |
| |
accrued on the relevant high value disposal had P acquired the |
| 10 |
interest on 5 April 2013 for a consideration equal to its market |
| |
| |
(3) | For the purposes of sub-paragraph (2), the amount of the gain or |
| |
loss accruing to P is to be computed (whether or not that would |
| |
otherwise be the case) as if P were within the charge to capital |
| 15 |
gains tax (but not within the charge to corporation tax on |
| |
| |
(4) | “The relevant fraction” is—![equation: over[times[char[C],char[D]],times[char[T],char[D]]]](missing.gif) |
| |
| |
| “CD” is the number of days in the relevant ownership period |
| 20 |
which are ATED chargeable days; |
| |
| “TD” is the total number of days in the relevant ownership period. |
| |
(5) | “The relevant ownership period” means the period beginning |
| |
with 6 April 2013 and ending with the day before the day on which |
| |
the relevant high value disposal occurs. |
| 25 |
(6) | “ATED chargeable day” means any day by virtue of which |
| |
condition C in section 2C(4) is met in relation to the relevant high |
| |
| |
4 (1) | The gain or loss accruing on the relevant high value disposal |
| |
which is not ATED-related is computed as follows. |
| 30 |
| |
| Determine the amount of the notional pre-April 2013 gain or loss. |
| |
| |
| In a case where there is a notional post-April 2013 gain— |
| |
(a) | determine the amount of that gain remaining after the |
| 35 |
deduction of the ATED-related gain determined under |
| |
| |
(b) | adjust that remaining gain by reducing it by the notional |
| |
| |
| 40 |
| In a case where there is a notional post-April 2013 loss, determine |
| |
the amount of that loss remaining after deduction of the ATED- |
| |
related loss determined under paragraph 3. |
| |
| |
| 45 |
|
| |
|
| |
|
(a) | the amount of any gain or loss determined under Step 1, |
| |
| |
(b) | the amount of any adjusted gain determined under Step 2 |
| |
or (as the case may be) any loss determined under Step 3, |
| |
| (treating any amount which is a loss as a negative amount). |
| 5 |
| |
| If the result is a positive amount, that amount is the gain on the |
| |
relevant high value disposal which is not ATED-related. |
| |
| If the result is a negative amount, that amount (expressed as a |
| |
positive number) is the loss on the relevant high value disposal |
| 10 |
which is not ATED-related. |
| |
(2) | “The notional pre-April 2013 gain or loss” means the gain or loss |
| |
which would have accrued on 5 April 2013 had the interest been |
| |
disposed of for a consideration equal to its market value on that |
| |
| 15 |
(3) | For the purposes of sub-paragraph (2), the amount of the gain or |
| |
loss accruing to P is to be computed (whether or not that would |
| |
otherwise be the case) as if P were within the charge to corporation |
| |
tax on chargeable gains (but not within the charge to capital gains |
| |
| 20 |
(4) | Paragraph 3(2) and (3) (meaning of “notional post-April 2013 gain |
| |
or loss”) also applies for the purposes of this paragraph. |
| |
(5) | “Notional indexation allowance” means the relevant fraction of an |
| |
amount equal to the difference between— |
| |
(a) | the indexation allowance which (in the absence of section |
| 25 |
2B and this Schedule) would be made under Chapter 4 of |
| |
Part 2 in determining the gain accruing on the relevant |
| |
high value disposal were that gain being computed for |
| |
corporation tax purposes, and |
| |
(b) | the indexation allowance which is made under Chapter 4 |
| 30 |
of Part 2 in determining the notional pre-April 2013 gain. |
| |
(6) | “The relevant fraction” is—![equation: over[plus[times[char[T],char[D]],minus[times[char[C],char[D]]]],times[char[T],char[
D]]]](missing.gif) |
| |
| where “CD” and “TD” have the same meaning as in paragraph |
| |
| |
Election for paragraph 2 to 4 not to apply to a chargeable interest |
| 35 |
5 (1) | A person may make an election under this paragraph for |
| |
paragraphs 2 to 4 not to apply in relation to a chargeable interest |
| |
held by (or any part of which is held by) the person on 5 April |
| |
| |
(2) | An election is irrevocable. |
| 40 |
(3) | An election must be made by being included in a tax return under |
| |
the Management Act for the tax year in which the first relevant |
| |
high value disposal by the person of the chargeable interest (or |
| |
any part of it) on or after 6 April 2013 occurs. |
| |
|
| |
|