Tax treatment of acquisition, disposal or revaluation of certain rights.

Finance Act 2000

2000 Chapter 17 - continued

PART III, INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX - continued

Other relieving provisions - continued

Tax treatment of acquisition, disposal or revaluation of certain rights.

87. Schedule 23 to this Act has effect with respect to the treatment of amounts relating to the acquisition, disposal or revaluation of-

(a) licences granted under section 1 of the Wireless Telegraphy Act 1949 in accordance with regulations made under section 3 of the Wireless Telegraphy Act 1998 (bidding for licences),

(b) indefeasible rights to use a telecommunications cable system, or

Contributions to local enterprise agencies, etc.

88. In sections 79(11) and 79A(7) of the Taxes Act 1988 (relief for contributions to local enterprise agencies, business links and similar organisations: time limits), the words "and before 1st April 2000" shall cease to have effect.

Waste disposal: entitlement of successor to allowances.

89. In Chapter V of Part IV of the Taxes Act 1988 (provisions relating to the Schedule D charge: deductions), after section 91B (waste disposal: site preparation), insert-

Provided the successor holds an estate or interest in the whole of the site, it need not be the same as that held by the predecessor.

"Waste disposal: entitlement of successor to allowances.	91BA. - (1) This section applies where-
	(a) site preparation expenditure has been incurred in relation to a waste disposal site,
	(b) that expenditure was incurred by a person in the course of carrying on a trade, and
	(c) on or after 21st March 2000-
	(i) that person ("the predecessor") ceases to carry on that trade, or ceases to carry it on so far as it relates to that site, and
	(ii) another person ("the successor") begins to carry on that trade, or to carry on in the course of a trade the activities formerly carried on by the predecessor in relation to that site.
	(2) If the conditions specified in the following provisions of this section are met, then, for the purposes of section 91B above-
	(a) the trade carried on by the successor shall be treated as the same trade as that carried on by the predecessor, and
	(b) allowances shall be made to the successor (and not to the predecessor) as if everything done to or by the predecessor had been done to or by the successor.
	(3) The first condition is that the whole of the site in question is transferred to the successor.
	(4) The second condition is that the successor, at the time he first deposits waste material at the site, holds a relevant licence in respect of the site which is then in force.
	(5) Expressions used in this section have the same meaning as in section 91B.".

Capital gains tax: gifts and trusts

Restriction of gifts relief.

90. - (1) In section 165(1) of the Taxation of Chargeable Gains Act 1992 (relief for gifts of business assets), in the closing words (which list the provisions restricting relief), for "sections 166 and 167" substitute "sections 166, 167 and 169".

(2) In section 260(1) of that Act (gifts on which inheritance tax is chargeable etc.), in the closing words (which list the provisions restricting relief), for "section 261" substitute "sections 169 and 261".

(3) In section 165(2)(b)(i) of, and paragraph 2(2)(b)(i) of Schedule 7 to, that Act (shares or securities in respect of which gifts relief may be claimed), for "neither listed on a recognised stock exchange nor dealt in on the Unlisted Securities Market" substitute "not listed on a recognised stock exchange".

(4) In section 165(3)(b) of that Act (disposals of shares or securities excepted from gifts relief), after "shares or securities," insert "the transferee is a company or".

(5) This section has effect in relation to disposals made on or after 9th November 1999.

Disposal of interest in settled property: deemed disposal of underlying assets.

91. - (1) After section 76 of the Taxation of Chargeable Gains Act 1992, insert-

"Disposal of interest in settled property: deemed disposal of underlying assets.

76A. Schedule 4A to this Act has effect with respect to disposals for consideration of an interest in settled property.".

(2) After Schedule 4 to that Act insert the Schedule 4A set out in Schedule 24 to this Act.

(3) This section applies to any disposal of an interest in settled property made, or the effective completion of which falls, on or after 21st March 2000.

Expressions used in this subsection have the same meaning as in Schedule 4A to the Taxation of Chargeable Gains Act 1992.

Transfers of value by trustees linked with trustee borrowing.

92. - (1) After section 76A of the Taxation of Chargeable Gains Act 1992 (inserted by section 91(1) above), insert-

"Transfers of value by trustees linked with trustee borrowing.

76B. Schedule 4B to this Act has effect with respect to transfers of value by trustees that are, in accordance with the Schedule, treated as linked with trustee borrowing.".

(2) After Schedule 4A to that Act (inserted by section 91(2) above), insert the Schedule 4B set out in Schedule 25 to this Act.

(3) After section 85 of that Act, insert-

"Transfers of value: attribution of gains to beneficiaries.

85A. Schedule 4C to this Act has effect with respect to the attribution to beneficiaries of gains accruing under Schedule 4B.".

(4) After Schedule 4B to the Taxation of Chargeable Gains Act 1992 (inserted by subsection (2) above), insert the Schedule 4C set out in Part I of Schedule 26 to this Act.

The consequential amendments in Part II of Schedule 26 to this Act have effect.

(5) The provisions of this section have effect in relation to any transfer of value in relation to which the material time is on or after 21st March 2000.

The expressions "transfer of value" and "material time" have the same meaning in this subsection as in Schedule 4B to the Taxation of Chargeable Gains Act 1992.

Restriction on set-off of trust losses.

93. - (1) After section 79 of the Taxation of Chargeable Gains Act 1992, insert-

This applies to the whole of the chargeable gain (and not just the element deferred as a result of the claim to gifts relief).

"Restriction on set-off of trust losses.	79A. - (1) This section applies to a chargeable gain accruing to the trustees of a settlement where-
	(a) in computing the gain, the allowable expenditure is reduced in consequence, directly or indirectly, of a claim to gifts relief in relation to an earlier disposal to the trustees;
	(b) the transferor on that earlier disposal, or any person connected with the transferor, has at any time-
	(i) acquired an interest in the settled property, or
	(ii) entered into an arrangement to acquire such an interest; and
	(c) in connection with that acquisition or arrangement any person has at any time received, or become entitled to receive, any consideration.
	(2) Where this section applies to a chargeable gain, no allowable losses accruing to the trustees (in the year in which the gain accrues or any earlier year) may be set against the gain.
	(3) In this section-
	(a) "gifts relief" means relief under section 165 or 260; and
	(b) references to losses not being allowed to be set against a chargeable gain are to the losses not being allowed as a deduction against chargeable gains to the extent that they include that gain.
	(4) The references in subsection (1)(b) above to an interest in settled property have the same meaning as in Schedule 4A.".

(2) This section applies to gains accruing on or after 21st March 2000.

Prepared 7 August 2000