Regulation 13 Gains and losses on disposal of assets and liabilities

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

reg.13(4) amended by Exchange Gains and Losses (Transitional Provisions) 1996 reg. 6
reg. 13(1) words substituted by Exchange Gains and Losses (Transitional Provisions and Savings) 2002 reg. 8(2)
reg. 13(1A) inserted by Exchange Gains and Losses (Transitional Provisions and Savings) 2002 reg. 8(3)
reg. 13(2)(a)-(c) (3)(a)-(c) words substituted by Exchange Gains and Losses (Transitional Provisions and Savings) 2002 reg. 8(4)
reg. 13(4)(4A) substituted for (4) by Exchange Gains and Losses (Transitional Provisions and Savings) 2002 reg. 8(5)
reg. 13(5)-(8) omitted by Exchange Gains and Losses (Transitional Provisions and Savings) 2002 reg. 8(6)

(1)

Subject to regulations 14(1) and 15(1), paragraph (2) or (3) below applies where—

(a)

an accrual period ends as respects an existing asset or liability held or owed by a company which is the last accrual period as respects that asset or liability, and

(b)

there is as respects the asset or liability an attributed gain or loss.

(2)

If there is an attributed gain, E, as respects the asset or liability, then—

(a)

if there is a cumulative gain, A, as respects the asset or liability for the last period, an amount equal to E shall be deemed to be a relevant gain, accruing to the company as respects that asset or liability immediately before the end of the last accrual period;

(b)

if there is a cumulative loss, B, as respects the asset or liability for the last period, and E exceeds B, an amount equal to the excess shall be deemed to be a relevant gain, accruing to the company as respects that asset or liability immediately before the end of the last accrual period; and

(c)

if there is neither a cumulative loss nor a cumulative gain as respects the asset or liability for the last period, an amount equal to E shall be deemed to be a relevant gain, accruing to the company as respects that asset or liability immediately before the end of the last accrual period.

(3)

If there is an attributed loss, F, as respects the asset or liability, then—

(a)

if there is a cumulative loss, B, as respects the asset or liability for the last period, an amount equal to F shall be deemed to be a relevant loss, accruing to the company as respects that asset or liability immediately before the end of the last accrual period;

(b)

if there is a cumulative gain, A, as respects the asset or liability for the last period, and F exceeds A, an amount equal to the excess shall be deemed to be a relevant loss, accruing to the company as respects that asset or liability immediately before the end of the last accrual period; and

(c)

if there is neither a cumulative loss nor a cumulative gain as respects the asset or liability for the last period, an amount equal to F shall be deemed to be a relevant loss, accruing to the company as respects that asset or liability immediately before the end of the last accrual period.

(4)

In paragraphs (2) and (3) above any reference to a relevant gain or loss is—

(a)

in relation to a regulation 6(3) asset, a chargeable gain or an allowable loss; and

(b)

in relation to any other asset or any liability, an initial exchange gain or an initial exchange loss;

and in relation to a regulation 6(3) asset, those paragraphs have effect subject to regulation 14(2) to (11).

(5)

If the asset or liability has in whole or in part been held or owed by the company in exempt circumstances at any time during the last accrual period, then any initial exchange gain or loss which accrues as respects that asset or liability by virtue of paragraph (2) or (3) above shall be treated as not being an exchange gain or loss of a trade or part of a trade for that accrual period, and section 129 shall apply accordingly.

(6)

Subject to paragraph (7) below, if the asset or liability is one as respects which section 127 applies and the debt has been reduced during an accrual period, then—

(a)

the debt shall be treated as if it were two debts (all the terms and conditions of which are the same as those of the actual debt except as to principal) one equal to the amount outstanding at the end of the accrual period and the other equal to the difference between that amount and the amount of the debt at the beginning of the period, and

(b)

the attributed gain or loss, the cumulative taxed gain or loss and the cumulative gain or loss (if any) which is found as respects the asset or liability for that accrual period shall each be divided proportionately into two parts according to the proportion by which the debt has been reduced, and

(c)

that part of each of those gains or losses which bears the same proportion to the actual gain or loss as the amount of the debt outstanding at the end of the period bears to the amount of the debt at the beginning of the period shall be taken into account under regulation 12 and the other part shall be taken into account under paragraphs (1) to (5) above.

(7)

Paragraph (6) shall not apply—

(a)

where the amount of the debt increased before the reduction occurred unless the debt was reduced to an amount less than the amount it was before the increase (or if there has been more than one, the first increase) occurred; or

(b)

as respects the last accrual period for the asset or liability if an initial exchange gain or loss does not accrue (disregarding this Part) as respects the asset or liability for that period.

(8)

Paragraph (6) may apply in relation to an asset or liability for more than one accrual period if the debt is reduced in more than one accrual period.