Paragraph 16 F1

(1)

Where an interest in land is under subsection (1) of the principal section or paragraph 2(3) of this Schedule deemed to have been disposed of on a particular date and before that date (but after 17th December 1973) there was a part disposal of that interest by way of the grant of a lease or sub-lease at a premium, then, if income tax has become chargeable under section 80 of the Taxes Act on any amount by reference to that premium so that an exclusion or deduction of that amount falls to be made under paragraph 5(1) or (2) of [Schedule 3 to the Capital Gains Tax Act 1979 F2], the two following sub-paragraphs shall apply; and in those sub-paragraphs “the said interest” means the interest in land first mentioned in this sub-paragraph.

(2)

In computing under [Chapter II of Part II of the Capital Gains Tax Act 1979 ] the amount of the gain accruing on the disposal of the said interest—

(a)

the consideration for the disposal shall be treated as increased by an amount equal to the premium paid in respect of the grant of the said lease or sub-lease;

(b)

the sums allowable by virtue of paragraphs (a) and (b) of [section 32(1) of that ActF3] as a deduction from the consideration for the disposal shall be treated as including any part of those sums which is as a result of an apportionment under [section 35 of that Act] allowable as a deduction in computing under [the said Chapter II ] the amount of the gain accruing on the part disposal; and

(c)

the gain as computed in accordance with (a) and (b) above shall then be reduced by the amount of any gain which (after any exclusion or deduction falling to be made under the said paragraph 5(1) or (2)) accrued on the part disposal, and the amount resulting from that reduction shall (subject to section 38(2) of this Act) be taken as the amount of the gain accruing on the disposal of the said interest.

(3)

In a case falling within sub-paragraph (1) above involving more than one part disposal in relation to which sub-paragraph (2) above is applicable, the provisions of sub-paragraph (2)(a) and (b) above shall operate cumulatively as regards those part disposals, and the reference in sub-paragraph (2)(c) above to the gain as computed in accordance with those provisions shall be construed accordingly.

(4)

In this and the following paragraph “premium” has the same meaning as in paragraph 5(1) and (2) of [Schedule 3 to the Capital Gains Tax Act 1979 ].

Annotations

Textual amendments

F1: Sch. 9 repealed by Finance Act 1985 (c. 54, SIF 63:1), s. 98(6)and Sch. 27 Part Xin relation to disposals of interests in land taking place on or after 19March Finance Act 1985 (c. 54, SIF 63:1),but without affecting the construction of 1979 (C) Sch.5 para. 9(5).
F2: Capital Gains Tax Act 1979 (c. 14, SIF 63:1), s. 157(2)and Sch. 7 paras. 8and 9for 1979-80et seq.
F3: Capital Gains Tax Act 1979 (c. 14, SIF 63:1), s. 157(2)and Sch. 7 paras. 8and 9for 1979-80et seq.