|
| |
|
Values to be used in special cases |
| |
856 | Assets acquired or realised together |
| |
(1) | Any reference in this Part to the acquisition or realisation of an asset includes |
| |
a reference to the acquisition or realisation of that asset together with other |
| |
| 5 |
(2) | For the purposes of this Part assets acquired or realised as a result of one |
| |
bargain are treated as acquired or realised together even though— |
| |
(a) | separate prices are, or purport to be, agreed for separate assets, or |
| |
(b) | there are, or purport to be, separate acquisitions or realisations of |
| |
| 10 |
(3) | If assets are acquired together, any values allocated to particular assets by the |
| |
company in accordance with generally accepted accounting practice must be |
| |
accepted for the purposes of this Part. |
| |
(4) | If no such values are so allocated, so much of the expenditure as on a just and |
| |
reasonable apportionment is properly attributable to each asset is treated for |
| 15 |
the purposes of this Part as referable to that asset. |
| |
(5) | If assets are realised together, so much of the proceeds of realisation as on a just |
| |
and reasonable apportionment is properly attributable to each asset is treated |
| |
for the purposes of this Part as proceeds of the realisation of that asset. |
| |
857 | Deemed market value acquisition: adjustment where nil accounting value |
| 20 |
(1) | This section applies if— |
| |
(a) | a company is treated for the purposes of this Part as acquiring an asset |
| |
| |
(b) | the accounting value of the asset transferred is nil in the hands of the |
| |
| 25 |
(2) | In such a case any reference in this Part to— |
| |
(a) | the cost of the asset recognised for accounting purposes, |
| |
(b) | the accounting value of the asset, or |
| |
(c) | any loss recognised for accounting purposes in respect of capitalised |
| |
expenditure on the asset, |
| 30 |
| is a reference to the cost, value or loss that would have been recognised if the |
| |
asset had been acquired at market value. |
| |
(3) | If the asset is revalued, the revaluation is ignored. |
| |
(4) | In this section “revaluation” has the same meaning as in section 723 (see |
| |
subsection (5) of that section) and “revalued” must be read accordingly. |
| 35 |
| |
| |
(1) | For the purposes of this Part— |
| |
(a) | fungible assets of the same kind that are held by the same person in the |
| |
same capacity are treated as indistinguishable parts of a single asset, |
| 40 |
|
| |
|
| |
|
(b) | that asset is treated as growing as additional assets of the same kind are |
| |
| |
(c) | that asset is treated as diminishing as some of the assets are realised. |
| |
(2) | In this Part “fungible assets” means assets of a nature to be dealt in without |
| |
identifying the particular assets involved. |
| 5 |
Assets ceasing to be or becoming chargeable intangible assets |
| |
859 | Asset ceasing to be chargeable intangible asset: deemed realisation at market |
| |
| |
(1) | If an asset ceases to be a chargeable intangible asset in relation to a company in |
| |
any of the circumstances specified in subsection (2), this Part applies as if— |
| 10 |
(a) | immediately before the asset ceased to be a chargeable intangible asset |
| |
in relation to the company, the company had realised the asset for its |
| |
market value at that time, and |
| |
(b) | the company had immediately reacquired it at that value. |
| |
(2) | The circumstances are— |
| 15 |
(a) | that the company ceases to be UK resident, |
| |
(b) | in the case of a company that is not UK resident, any circumstances not |
| |
involving the realisation of the asset by the company, and |
| |
(c) | that the asset begins to be held for the purposes of a mutual trade or |
| |
| 20 |
(3) | Subsection (1) is subject to section 860. |
| |
860 | Asset ceasing to be chargeable intangible asset: postponement of gain |
| |
(1) | This subsection applies if— |
| |
(a) | section 859 applies because a company (“A”) ceases to be UK resident, |
| |
(b) | immediately before A ceases to be UK resident the asset is held by it for |
| 25 |
the purposes of a trade carried on by it outside the United Kingdom |
| |
through a permanent establishment, |
| |
(c) | the proceeds of the realisation of the asset that is treated as occurring |
| |
under section 859 exceed the original cost of the asset recognised for tax |
| |
| 30 |
(d) | immediately after A ceases to be UK resident it is a 75% subsidiary of |
| |
another company (“B”) that is UK resident, and |
| |
(e) | A and B so elect by notice given to an officer of Revenue and Customs |
| |
not later than 2 years after the date on which A ceased to be UK |
| |
| 35 |
(2) | If subsection (1) applies, this Part applies as if the proceeds of the realisation of |
| |
the asset that is treated as occurring under section 859 were reduced to the |
| |
original cost of the asset recognised for tax purposes. |
| |
(3) | For the later treatment of the amount of the reduction under subsection (2), see |
| |
| 40 |
| |
(a) | “the postponed gain” means the amount of that reduction, and |
| |
(b) | references to “A” and “B” must be read in accordance with this section. |
| |
|
| |
|
| |
|
861 | Treatment of postponed gain on subsequent realisation |
| |
(1) | This section applies if A realises the asset to which section 860 applies before |
| |
the end of the period of 6 years after the date on which it ceases to be UK |
| |
| |
(2) | B must bring into account for tax purposes— |
| 5 |
(a) | a credit equal to the postponed gain, or |
| |
(b) | in the case of a part realisation, a credit equal to the appropriate |
| |
proportion of the postponed gain. |
| |
(3) | The appropriate proportion is— |
| |
| 10 |
| |
MVB is the market value of the asset immediately before the part |
| |
| |
MVA is the market value of the asset immediately after the part |
| |
| 15 |
(4) | Subsection (2) does not apply— |
| |
(a) | so far as the postponed gain has already been brought into account on |
| |
a previous part realisation, or |
| |
(b) | if the postponed gain has already been brought into account under |
| |
| 20 |
(5) | A credit brought into account by B under this section is treated as a non-trading |
| |
credit for the purposes of Chapter 6 (how credits and debits are given effect). |
| |
862 | Treatment of postponed gain in other cases |
| |
(1) | This section applies if at any time after A ceases to be UK resident— |
| |
(a) | A ceases to be a 75% subsidiary of B on the disposal by B of ordinary |
| 25 |
| |
(b) | A ceases to be such a subsidiary otherwise than on such a disposal and |
| |
later B disposes of such shares, or |
| |
(c) | B ceases to be UK resident. |
| |
(2) | B must bring into account for tax purposes a credit equal to the postponed gain. |
| 30 |
(3) | Subsection (2) does not apply so far as the postponed gain has already been |
| |
brought into account under section 861. |
| |
(4) | Any credit falling to be brought into account under subsection (2) because B |
| |
ceases to be UK resident must be brought into account immediately before it |
| |
| 35 |
(5) | A credit brought into account by B under this section is treated as a non-trading |
| |
credit for the purposes of Chapter 6 (how credits and debits are given effect). |
| |
|
| |
|
| |
|
863 | Asset becoming chargeable intangible asset |
| |
(1) | This section applies if an asset becomes a chargeable intangible asset in relation |
| |
| |
(a) | on the company becoming UK resident, |
| |
(b) | in the case of a company that is not UK resident, on the asset beginning |
| 5 |
to be held for the purposes of a trade carried on by the company in the |
| |
United Kingdom through a permanent establishment, or |
| |
(c) | on the asset ceasing to be held for the purposes of a mutual trade or |
| |
| |
(2) | This Part applies as if— |
| 10 |
(a) | the company had acquired the asset immediately after it became a |
| |
chargeable intangible asset in relation to the company, and |
| |
(b) | had done so for its accounting value at that time. |
| |
| |
864 | Tax avoidance arrangements to be ignored |
| 15 |
(1) | In determining whether a credit or a debit is to be brought into account under |
| |
this Part and, if so, its amount, any tax avoidance arrangements are ignored. |
| |
(2) | Arrangements are “tax avoidance arrangements” for this purpose if their main |
| |
object or one of their main objects is to enable a company— |
| |
(a) | to obtain a debit under this Part to which it would not otherwise be |
| 20 |
| |
(b) | to obtain a debit under this Part which exceeds that to which it would |
| |
| |
(c) | to avoid having to bring a credit into account under this Part, or |
| |
(d) | to reduce the amount of any such credit. |
| 25 |
| |
“arrangements” includes any scheme, agreement or understanding, |
| |
whether or not it is legally enforceable, and |
| |
“brought into account” means brought into account for tax purposes. |
| |
865 | Debits for expenditure not generally deductible for tax purposes |
| 30 |
(1) | No debit may be brought into account for tax purposes under this Part in |
| |
respect of expenditure that is not generally deductible for tax purposes. |
| |
(2) | Expenditure is “not generally deductible for tax purposes” so far as revenue |
| |
expenditure of that description incurred for the purposes of a trade would be |
| |
non-deductible because of a provision specified in subsection (3). |
| 35 |
(3) | Those provisions are— |
| |
(a) | section 56 (car or motor cycle hire), |
| |
(b) | section 1298 (business entertainment and gifts), |
| |
(c) | section 1304 (crime-related payments), and |
| |
(d) | section 246(2) of FA 2004 (expenditure on benefits under employer- |
| 40 |
financed retirement benefits schemes). |
| |
|
| |
|