Paragraph 485

Amend section 108 (effect of disposal to connected person on overseas leasing pool) as follows.

In subsection (1)(b) for the words from “is one” to “reconstructions)” substitute

“does not occur on the occasion of a change in the persons carrying on the qualifying activity—

(i)

which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or

(ii)

in relation to which Condition A or Condition B is met”.

After subsection (1) insert—

“(1A)

Condition A is that—

(a)

at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)

at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(1B)

Condition B is that—

(a)

the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)

a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)

at least one company which carried the activity on before the change continued to carry it on after the change.”