Paragraph 11

Section 161 (appropriations to and from stock) is amended as follows.

In subsection (1) for “subsection (3)” substitute “ subsections (3) to (3ZB) ”.

After subsection (3) insert—

“(3ZA)

But if the person—

(a)

meets the requirement of paragraph (a) or (b) of subsection (3), and

(b)

(ignoring any election under this section) would be treated under subsection (1) as making a relevant high value disposal on which an ATED-related gain chargeable to, or loss allowable for the purposes of, capital gains tax under section 2B would accrue,

the person may not elect under subsection (3) but may elect for subsection (3ZB) to apply.

(3ZB)

Subject to subsection (4), where an election is made for this subsection to apply—

(a)

a gain or loss accruing on the disposal under subsection (1) which is not ATED-related is not a chargeable gain or an allowable loss,

(b)

the market value of the asset at the time of the appropriation is, for the purposes of computing the profits of the trade for the purposes of tax, to be treated as reduced by the amount of any gain, or increased by the amount of any loss, which would be a chargeable gain or allowable loss but for paragraph (a), and

(c)

the chargeable gain or allowable loss which accrues on that disposal and is ATED-related is unaffected by the election.”

In subsection (3A), after “subsection (3)” insert “ or (3ZA) ”.

In subsection (4), after “subsection (3)” insert “ or (3ZA) ”.