Section 84 Compensation stock.C2C1
United Kingdom
This section has effect where gilt-edged securities are exchanged for shares in pursuance of any enactment (including an enactment passed after this Act) which provides for the compulsory acquisition of any shares and the issue of gilt-edged securities instead.
The exchange shall not constitute a conversion of securities within section 82 above and accordingly the gilt-edged securities shall not be treated as having been acquired on any date earlier than that on which they were issued or for any consideration other than the value of the shares as determined for the purposes of the exchange.
The exchange shall be treated as not involving any disposal of the shares by the person from whom they were compulsorily acquired but—
there shall be calculated the gain or loss that would have accurued to him if he had then disposed of the shares for a consideration equal to the value mentioned in subsection (2) above, and
on a subsequent disposal of the whole or part of the gilt-edged securities by the person to whom they were issued—
there shall be deemed to accrue to him (in addition to any gain or loss that actually accrues) the whole or a corresponding part of the gain or loss mentioned in paragraph (a) above, and
F1if the disposal is within section 67(1) above (exemption for gilt-edged securities) that section shall have effect only in relation to any gain or loss that actually accrues and not in relation to any gain or loss that is deemed to accrue as aforesaid.
Where a person to whom gilt-edged securities of any kind were issued as mentioned in subsection (1) above disposes of securities of that kind, the securities of which he disposes—
shall, so far as possible, be identified with securities which were issued to him as mentioned in subsection (1) above rather than with other securities of that kind, and
subject to paragraph (a) above, shall be identified with securities issued at an earlier time rather than with those issued at a later time.
Subsection (3)(b) above shall not apply to any disposal falling within the provisions of—
section 44(1) above (disposals between husband and wife),
section 49(4) above (disposals by personal representatives to legatees), or
section 273(1) of F3the Taxes Act 1970 (disposals within a group of companies);
but a person who has acquired the securities on a disposal falling within those provisions (and without there having been a previous disposal not falling within those provisions or a devolution on death) shall be treated for the purposes of subsections (3)(b) and (4) above as if the securities had been issued to him.
Where the gilt-edged securities to be exchanged for any shares are not issued until after the date on which the shares are compulsorily acquired but on that date a right to the securities is granted, this section shall have effect as if the exchange had taken place on that date, as if references to the issue of the securities and the person to whom they were issued were references to the grant of the right and the person to whom it was granted and references to the disposal of the securities included references to disposals of the rights.
In this section “shares” includes securities within the meaning of section 82 above.
This section has effect subject to section 54 of the M1Finance Act 1976 (compulsory acquisition from certain companies of aircraft and shipbuilding shares).
Annotations
Textual amendments
- F1
Words repealed by Finance Act 1985 (c. 54), s. 98(6) and Sch. 27 Part VII with respect to disposals on or after 2 July 1986
- F2
S. 84(4)(a)(b) substituted by Finance Act 1985 (c. 54), s. 67(2) with respect to disposals on or after 2 July 1986
- F3
Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 15
Marginal citations
- M1
Modifications
- C1
See— 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)
- C2
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)