|
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|
435 | Incidental costs of making disposal |
| |
References in section 434 to the incidental costs of making the disposal to the |
| |
individual making it are to— |
| |
(a) | fees, commission or remuneration paid for the professional services of |
| |
a surveyor, valuer, auctioneer, accountant, agent or legal adviser which |
| 5 |
are wholly and exclusively incurred by the individual for the purposes |
| |
| |
(b) | costs of transfer or conveyance wholly and exclusively incurred by the |
| |
individual for the purposes of the disposal, |
| |
(c) | costs of advertising to find a buyer, and |
| 10 |
(d) | costs reasonably incurred in making any valuation or apportionment |
| |
required for the purposes of this Chapter. |
| |
| |
(1) | For the purposes of the formula in section 434(2) consideration for the disposal |
| |
| 15 |
(a) | without any discount for postponement of the right to receive any part |
| |
| |
(b) | in the first instance, without regard to a risk of any part of it being |
| |
| |
(c) | in the first instance, without regard to the right to receive any part of it |
| 20 |
| |
| |
(a) | any part of the consideration so brought into account subsequently |
| |
proves to be irrecoverable, and |
| |
| 25 |
| such adjustment as is required in consequence must be made. |
| |
(3) | An adjustment under subsection (2) may be made by way of discharge or |
| |
repayment of tax or otherwise. |
| |
Value of net benefit to charity |
| |
437 | Value of net benefit to charity |
| 30 |
(1) | For the purposes of this Chapter the value of the net benefit to a charity is— |
| |
(a) | the market value of the qualifying investment, or |
| |
(b) | if the charity is, or becomes, subject to a disposal-related obligation, the |
| |
market value of the qualifying investment reduced by the total amount |
| |
of the disposal-related liabilities of the charity. |
| 35 |
(2) | This section is supplemented by— |
| |
section 438 (market value of qualifying investments), |
| |
section 439 (meaning of “disposal-related obligation”), and |
| |
section 440 (meaning and amount of “disposal-related liability”). |
| |
|
| |
|
| |
|
438 | Market value of qualifying investments |
| |
(1) | The market value of a qualifying investment for the purposes of this Chapter |
| |
is determined in accordance with sections 272 to 274 of TCGA 1992 (subject to |
| |
Part 1 of Schedule 11 to that Act). |
| |
(2) | But, in the case of an interest in an offshore fund for which separate buying and |
| 5 |
selling prices are published regularly by the managers of the fund, the market |
| |
value for the purposes of this Chapter is equal to the buying price (that is the |
| |
lower price) published on— |
| |
(a) | the day of the disposal, or |
| |
(b) | if none were published on that day, on the latest day on which the |
| 10 |
prices were published before that day. |
| |
439 | Meaning of “disposal-related obligation” |
| |
(1) | In this Chapter an obligation is a “disposal-related obligation”, in relation to a |
| |
qualifying investment, if condition A or condition B is met in relation to it. |
| |
(2) | The obligation may be to any person (whether or not the individual making the |
| 15 |
disposal or a person connected with the individual). |
| |
(3) | Condition A is that it is reasonable to suppose that the disposal of the |
| |
qualifying investment to the charity would not have been made in the absence |
| |
| |
(4) | Condition B is that the obligation (whether in whole or in part) relates to, is |
| 20 |
framed by reference to, or is conditional on the charity receiving, the qualifying |
| |
investment or a disposal-related investment. |
| |
(5) | In applying condition A, all the circumstances must be taken into account |
| |
(including, in particular, the difference in the value of the net benefit to the |
| |
charity calculated under section 437(1)(a) and that value calculated under |
| 25 |
| |
(6) | In subsection (4) “disposal-related investment” means any of the following— |
| |
(a) | an asset of the same class or description as the qualifying investment |
| |
(irrespective of size, quantity or amount), |
| |
(b) | an asset derived from, or representing, the qualifying investment, |
| 30 |
whether in whole or in part and whether directly or indirectly, and |
| |
(c) | an asset from which the qualifying investment is derived, or which the |
| |
qualifying investment represents, whether in whole or in part and |
| |
whether directly or indirectly. |
| |
(7) | In this Chapter “obligation” includes a reference to each of the following— |
| 35 |
(a) | a scheme, arrangement or understanding of any kind, whether or not |
| |
| |
(b) | a series of obligations (whether or not between the same parties). |
| |
440 | Meaning and amount of “disposal-related liability” |
| |
(1) | In this Chapter a liability is a “disposal-related liability” in the case of a |
| 40 |
qualifying investment if it is a liability of the charity under a disposal-related |
| |
obligation in relation to the qualifying investment. |
| |
|
| |
|
| |
|
(2) | If the disposal-related obligation is contingent, the amount to be brought into |
| |
account for the purposes of section 437 at any time in respect of the disposal- |
| |
related liability, so far as contingent, is— |
| |
(a) | if the contingency occurs, the amount or value of the liability actually |
| |
incurred in consequence of the occurrence of the contingency, or |
| 5 |
(b) | if the contingency does not occur, nil. |
| |
Special provisions about qualifying interests in land |
| |
441 | Certificate required from charity |
| |
(1) | This section applies if the qualifying investment is a qualifying interest in land. |
| |
(2) | No individual may make a claim for relief under this Chapter unless the |
| 10 |
individual has received a certificate given by or on behalf of the charity. |
| |
(3) | The certificate must— |
| |
(a) | describe the qualifying interest in land, |
| |
(b) | specify the date of the disposal, and |
| |
(c) | state that the charity has acquired the qualifying interest in land. |
| 15 |
442 | Qualifying interests in land held jointly |
| |
(1) | This section applies if the qualifying investment is a qualifying interest in land. |
| |
(2) | It applies if two or more persons (“the owners”)— |
| |
(a) | are jointly beneficially entitled to the qualifying interest in land, or |
| |
(b) | are, taken together, beneficially entitled in common to the qualifying |
| 20 |
| |
(3) | Relief under this Chapter is available if— |
| |
(a) | at least one of the owners is an individual, and |
| |
(b) | all the owners dispose of the whole of their beneficial interests in the |
| |
qualifying interest in land to the charity. |
| 25 |
(4) | Relief under this Chapter is available to each of the owners who is an |
| |
| |
(5) | The amount of relief under this Chapter to be given to an individual is such |
| |
share of the relievable amount as is allocated to the individual by an agreement |
| |
made between those owners who are— |
| 30 |
| |
(b) | qualifying companies. |
| |
(6) | A company is a qualifying company if— |
| |
(a) | it is not itself a charity, and |
| |
(b) | it is not within section 587B(8)(a) of ICTA. |
| 35 |
(7) | If one or more of the owners is not an individual— |
| |
(a) | for the purpose of determining whether the owners’ beneficial interests |
| |
are disposed of as mentioned in subsection (3)(b) of this section, |
| |
subsections (2) to (4) of section 433 apply as if references to an |
| |
individual included a reference to a person who is not an individual, |
| 40 |
| |
|
| |
|
| |
|
(b) | the total amount of relief given under this Chapter and section 587B of |
| |
ICTA as a result of the disposal of the qualifying interest in land is not |
| |
to exceed the relievable amount. |
| |
443 | Calculation of relievable amount where joint disposal of interest in land |
| |
(1) | This section applies for the purpose of calculating the relievable amount in a |
| 5 |
case where relief under this Chapter is available as a result of section 442(3). |
| |
(2) | Calculate the relievable amount as if— |
| |
(a) | the owners were a single individual, and |
| |
(b) | the disposals of the owners’ beneficial interests were a single disposal |
| |
by that single individual of the whole of the beneficial interest in the |
| 10 |
qualifying interest in land. |
| |
(3) | In particular, calculate the consideration mentioned at Step 1 in section 434(4) |
| |
| |
(a) | calculating, for each owner, the consideration for which the disposal of |
| |
the owner’s beneficial interest is treated as made for the purposes of |
| 15 |
TCGA 1992 as a result of section 257(2)(a) of that Act, and |
| |
(b) | adding together all the consideration calculated under paragraph (a). |
| |
(4) | Subsection (5) applies if one or more of the owners is neither— |
| |
| |
(b) | a qualifying company (see section 442(6)). |
| 20 |
(5) | In calculating the relievable amount make just and reasonable adjustments to |
| |
reduce the relievable amount to reflect the fact that relief under this Chapter or |
| |
section 587B of ICTA is not available to that owner or to those owners. |
| |
(6) | If one or more of the owners is a company within paragraph (b) of section |
| |
587B(8) of ICTA, in calculating the relievable amount make just and reasonable |
| 25 |
adjustments to reduce the relievable amount to reflect the requirements of sub- |
| |
paragraph (ii) of that paragraph. |
| |
| |
(1) | This section applies if the qualifying investment is a qualifying interest in land. |
| |
(2) | If a disqualifying event occurs at any time in the provisional period, the |
| 30 |
following are treated as never having been entitled to relief under this Chapter |
| |
in respect of the disposal of the qualifying interest in land— |
| |
(a) | in a case to which section 442 does not apply, the individual who made |
| |
| |
(b) | in a case to which section 442 applies, each individual who is an owner. |
| 35 |
(3) | All such assessments and adjustments of assessments are to be made as are |
| |
necessary to give effect to subsection (2). |
| |
(4) | A disqualifying event occurs if a person mentioned in subsection (5) becomes, |
| |
otherwise than for full consideration in money or money’s worth— |
| |
(a) | entitled to an interest or right in relation to all or part of the land to |
| 40 |
which the disposal relates, or |
| |
(b) | party to an arrangement under which the person enjoys some right in |
| |
relation to all or part of that land. |
| |
|
| |
|
| |
|
| |
(a) | in a case to which section 442 does not apply— |
| |
(i) | the individual who made the disposal, or |
| |
(ii) | a person connected with that individual, and |
| |
(b) | in a case to which section 442 applies— |
| 5 |
(i) | a person who is an owner, or |
| |
(ii) | a person connected with such a person. |
| |
(6) | A disqualifying event does not occur if a person becomes entitled to an interest |
| |
or right as mentioned in subsection (4)(a) as a result of a disposition of property |
| |
on death (whether the disposition is effected by will, under the law relating to |
| 10 |
| |
(7) | “The provisional period” is the period beginning with the date of the disposal |
| |
of the qualifying interest in land and ending with the fifth anniversary of the |
| |
normal self-assessment filing date for the tax year in which the disposal was |
| |
| 15 |
| |
445 | Prohibition against double relief |
| |
(1) | If a claim is made for relief under this Chapter in respect of a disposal— |
| |
(a) | section 108 of ITTOIA 2005 (gifts of trading stock to charities etc) does |
| |
not apply in relation to the disposal, and |
| 20 |
(b) | no relief in respect of the disposal is allowable under any other |
| |
provision of the Income Tax Acts. |
| |
(2) | For the effect on capital gains tax or corporation tax on chargeable gains where |
| |
an individual is entitled to relief under this Chapter, see section 257(2A) to (2C) |
| |
of TCGA 1992 (gifts to charities etc). |
| 25 |
446 | “Charity” to include exempt bodies |
| |
In this Chapter “charity” includes— |
| |
(a) | the Trustees of the National Heritage Memorial Fund, |
| |
(b) | the Historic Buildings and Monuments Commission for England, and |
| |
(c) | the National Endowment for Science, Technology and the Arts. |
| 30 |
| |
Annual payments and patent royalties |
| |
| |
(1) | This Chapter gives relief for some of the payments from which sums |
| |
representing income tax must be deducted under Chapter 6 of Part 15 |
| 35 |
(deduction from annual payments and patent royalties). |
| |
(2) | For the payments which attract relief, see sections 448 and 449. |
| |
|
| |
|