Introduction Details of the Schedule
6.Paragraph 2 makes consequential amendments to the rebasing rules at section 35(3) of the Taxation of Chargeable Gains Act 1992 (TCGA).
7.Paragraph 3 inserts new subsection (5A) in section 55 of TCGA. Section 55 concerns assets owned on 31st March or acquired on a no gain/no loss disposal.
8.New subsection (5A) provides that a disposal is also a no gain/no loss disposal if the effect of one of new sections 195B, 195C or 195E is that no gain or loss accrues to the person making the disposal. When one of the new sections has that effect, section 55(6)(b) of TCGA which relates to indexation allowance does not apply.
9.Paragraph 4 extends the application of section 175(2C) TCGA to the no gain/no loss provisions in new sections 195B, 195C and 195E. Section 175(2C) disapplies roll-over relief where the no/gain no loss provisions apply to an acquisition of new assets by a member of a group of companies. .
10.Paragraph 5 inserts new sections 195A, 195B, 195C, 195D and 195E.
11.New section 195A applies sections 195B to 195E of TCGA and defines terms used in those sections and section 196 of TCGA.
12.New section 195B applies to a licence-consideration swap. That is where the only consideration given by either party is the disposal of one or more licences.
13.New section 195C applies to a mixed-consideration swap.
14.New section 195D also applies to a mixed-consideration swap.
15.New section 195E applies to the giver of mixed consideration in a mixed consideration swap..
16.Paragraph 6 of the Schedule amends section 196 which is an interpretation provision.
17.Paragraph 7 inserts references to sections 195B, 195C and 195E in paragraph 1(2) of Schedule 3 to TCGA (assets held on 31st March 1982).
18.Paragraph 8 provides that Part 1 of this Schedule applies to disposals made on or after 22 April 2009.
19.Paragraph 10 inserts in section 198 of TCGA a new subsection (3) which provides that where the roll-over relief provisions in sections 152 and 153 TCGA apply to a material disposal and the asset which constitutes the new assets for the purposes of a ring fence trade is a depreciating asset, then section 154(2)(b) (cessation of use of an asset) shall apply as if the reference to a trade was a reference solely to a ring fence trade.
20.Paragraph 11 inserts in section 198 of TCGA a new subsection (2A) which provides that subsection (1) is subject to section 198(3)(a) of TCGA.
21.Paragraph 12 inserts new sections 198A to 198F after section 198 of TCGA.
22.New section 198A provides that if a person makes a claim, roll-over relief does not apply to the consideration for the disposal and any gain arising to the claimant is not a chargeable gain.
23.Subsection (1) applies the section if a person makes a disposal and acquisition which is a “ring fence reinvestment” (the term is defined at new section 198E(2)) and qualifies for roll-over relief.
24.New section 198B provides for a claim to be made in respect of a ring fence reinvestment where only part of the consideration is reinvested.
25.New section 198C provides for the provisional application of sections 198A and 198B.
26.Subsection (1) provides that the section applies where a person carrying on a ring fence trade disposes of old assets or an interest in old assets and makes a declaration in that person’s return for the chargeable period in which the disposal takes place. Details of the subject matter of the declaration are at paragraphs (a) to (e).
27.Subsection (3) provides a day when the declaration shall cease to have effect. If the declaration is wholly or partly withdrawn before the relevant day or is wholly or partly superseded before the relevant day by a valid claim under either section 198A or 198B, the declaration will cease to have effect, to the extent it is withdrawn or superseded, on the day on which it is withdrawn or superseded. To the extent that it is not withdrawn or superseded, the declaration will cease to have effect on the relevant day.
28.Subsection (4) provides the machinery for unwinding the effect of the declaration.
29.Subsection (6) defines the “relevant day”.
30.New section 198D prevents companies from making double claims and lays down the circumstances in which a claim may be withdrawn and replaced by a new claim.
31.New section 198E defines “ring fence investments” for the purposes of sections 198A to 198G.
32.New section 198F lays down the conditions to be met if a disposal and acquisition are to qualify for roll-over relief.
33.New section 198G lays down the conditions to be met if a disposal and acquisition is to qualify for section 153 relief.
34.Paragraph 13 provides that Part 2 applies in relation to disposals made on or after 22 April 2009 (whether the acquisition in which the consideration is reinvested takes place before, on or after that date).