Section 117 New assets which are depreciating assets.C7C1C2C3C4
United Kingdom
Sections 115 and 116 above F1and section 33 of the Finance Act 1990 shall have effect subject to the provisions of this section in which—
the “held over gain” means the amount by which, under those sections, and apart from the provisions of this section, any chargeable gain on one asset (called “asset No. 1”) is reduced, with a corresponding reduction of the expenditure allowable in respect of another asset (called “asset No. 2”),
any reference to a gain of any amount being carried forward to any asset is a reference to a reduction of that amount in a chargeable gain coupled with a reduction of the same amount in expenditure allowable in respect of that asset.
If asset No. 2 is a depreciating asset, the held over gain shall not be carried forward, but the claimant shall be treated as if so much of the chargeable gain on asset No. 1 as is equal to the held over gain did not accrue until—
the claimant disposes of asset No. 2, or
he ceases to use asset No. 2 for the purposes of a trade carried on by him, or
the expiration of a period of ten years beginning with the acquisition of asset No. 2,
whichever event comes first.
Where section 33 of the Finance Act 1990 has effect subject to the provisions of this section, subsection (2)(b) above shall have effect as if it read—
“(b)section 36(3) of the Finance Act 1990 applies as regards asset No. 2 (whether or not by virtue of section 36(5)), or”
If, in the circumstances specified in subsection (4) below, the claimant acquires an asset (called “asset No. 3”) which is not a depreciating asset, F3and claims under section 115 or 116 above—
the gain held over from asset No. 1 shall be carried forward to asset No. 3, and
the claim which applies to asset No. 2 shall be treated as withdrawn (so that subsection (2) above does not apply).
The circumstances are that asset No. 3 is acquired not later than the time when the chargeable gain postponed under subsection (2) above would accrue and, assuming—
that the consideration for asset No. 1 was applied in acquiring asset No. 3, and
that the time between the disposal of asset No. 1 and the acquisition of asset No. 3 was within the time limited by section 115(3) above,
the whole amount of the postponed gain could be carried forward from asset No. 1 to asset No. 3; and the claim under subsection (3) above shall be accepted as if those assumptions were true.
If part only of the postponed gain could be carried forward from asset No. 1 to asset No. 3, and the claimant so requires, that and the other part of the postponed gain shall be treated as derived from two separate assets, so that, on that claim—
subsection (3) above applies to the first-mentioned part, and
the other part remains subject to subsection (2) above.
For the purposes of this section, an asset is a depreciating asset at any time if—
at that time it is a wasting asset, as defined in section 37 above, or
within the period of ten years beginning at that time it will become a wasting asset (so defined).
Annotations
Textual amendments
- F1
Words inserted by Finance Act 1990 (c. 29, SIF 63:2), s. 40(2)
- F2
S. 117(2A) inserted by Finance Act 1990 (c. 29, SIF 63:2), s. 40(3)
- F3
Words substituted by Finance Act 1990 (c. 29, SIF 63:2), s. 40(4)
Modifications
- C1
See also Capital Gains Tax Act 1979 (c. 14), Sch. 6 para. 22
- C2
- C3
Ss. 115–121 restricted by Finance Act 1990 (c. 29, SIF 63:2), s. 40(5)(6)
- C4
See also Capital Gains Tax Act 1979 (c. 14), s. 111B(3)
- C5
See Finance Act 1984 (c. 43, SIF 63:2), ss. 50(1), 80 and Sch. 11 para. 1
- C6
See— Finance Act 1970 (c. 24, SIF 63:1, 2), s. 276(2); Development Land Tax Act 1976 (c. 24), s. 34 and Sch. 6 para. 5 (which Act was repealed by Finance Act 1985 (c. 54, SIF 63:2), ss. 93, 98(6) and Sch. 27 Pt. X); Finance Act 1988 (c. 39, SIF 63;1, 2), s. 97 and Sch. 9 para. 3(2); Finance Act 1989 (c. 26, SIF 63:2), s. 141 and Sch. 15 para. 1(2)
- C7
Ss. 115-121 excluded (E.W.S.) (16.1.1992) by S.I. 1992/58, art. 9, Sch. 2 para.10
Notes on the whole Act
Textual amendments
- F1
Act repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with s. 201(3), Sch. 11 paras. 20, 22, 26(2), 27 and with saving in Sch. 11 para. 24(2)) and subject to an amendment (prosp.) by Museum and Galleries Act 1992 (c. 44), s. 11(2), Sch. 8 Pt. I para. 1(1)(2)(7), and amendments by: Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21), s. 4(2), Sch. 2 para. 9(1)(2) (in force 6.4.1992 by S.I. 1991/2617, art. 2(f)); S.I. 1991/2874, art. 2 (in force 6.4.1992 by S.R. 1992/94, art. 2); Social Security (Consequential Provisions) Act 1992 (c. 6), s. 4, Sch. 2 para. 52(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), s. 4, Sch. 2 para. 20(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Finance (No. 2) Act 1992 (c. 48), ss. 35(2), 47, 48, 56, 77, Sch. 9 para. 20(1)(inserting ss. 143A and 143B), Sch. 17 paras. 3, 6(2)(5), 7, (the amendments coming into force 16.7.1992 except for the amendment by s. 56, Sch. 9 para. 20(1) which comes into force on 19.2.1993 by S.I. 1993/236, art. 2); and amendments (retrospective to 1.1.1992) by ss. 35(2), 47, 48 of the same 1992 Act, and amendments (27.7.1993 with effect as mentioned in ss. 84(3), 86(4), 88(4), 105(4) of the amending Act) by 1993 c. 34, ss. 84(3), 86(4), 88(4)(a)(b), 105(3)(4)