Finance Act 2015

Section 38

SCHEDULE 8 Relevant high value disposals: gains and losses

Introduction

1 The Taxation of Chargeable Gains Act 1992 is amended as follows.

“Relevant high value disposal”

2 (1) Section 2C (“relevant high value disposal”) is amended as follows.

(2) In subsection (6), in the definition of “the relevant ownership period” for “6 April 2013” substitute “6 April in the relevant year”.

(3) In that subsection, after that definition insert—

• ““the relevant year” means—

  (a)

  in Case 1 in paragraph 2 of Schedule 4ZZA, 2013;

  (b)

  in Case 2 in that paragraph, 2015;

  (c)

  in Case 3 in that paragraph, 2016;”.

(4) In subsection (7)(b), for “1 April 2013” substitute “1 April in the relevant year”.

Threshold amount for the tax year 2015-16

3 (1) Section 2D (CGT on ATED-related gains: the threshold amount) is amended as follows.

(2) In subsection (2) for “£2 million” substitute “£1 million”.

(3) In subsection (3) for “£2 million” substitute “£1 million”.

(4) In subsection (5) for ““£2 million”” substitute ““£1 million””.

(5) The amendments made by this paragraph have effect in relation to disposals occurring in the tax year 2015-16.

Threshold amount from 6 April 2016

4 (1) Section 2D (CGT on ATED-related gains: the threshold amount) is amended as follows.

(2) In subsection (2) for “£1 million” substitute “£500,000”.

(3) In subsection (3) for “£1 million” substitute “£500,000”.

(4) In subsection (5) for ““£1 million”” substitute ““£500,000””.

(5) The amendments made by this paragraph have effect in relation to disposals occurring on or after 6 April 2016.

Restriction of losses

5 In section 2E (restriction of losses), in subsection (3)—

(a) after “5 April 2013” insert “etc”, and

(b) for “post-April 2013” substitute “post-commencement”.

Calculation of gains and losses

6 Schedule 4ZZA (relevant high value disposals: gains and losses) is amended as follows.

7 For the italic heading before paragraph 2 substitute “Assets held on 5 April 2013, 5 April 2015 or 5 April 2016: no paragraph 5 election”.

8 For paragraph 2 substitute—

“2 (1) In Cases 1 to 3 below—

(a) paragraph 3 applies for the purposes of computing the gain or loss accruing to P which is ATED-related, and

(b) paragraph 4 applies for the purposes of computing the gain or loss accruing to P which is not ATED-related.

(2) Case 1 is that—

(a) the interest disposed of was held by P on 5 April 2013, and

(b) neither Case 2 nor Case 3 applies.

(3) Case 2 is that—

(a) the interest disposed of was held by P on 5 April 2015,

(b) Case 3 does not apply, and

(c) no relevant single dwelling interest was subject to ATED on one or more days in the period ending with 31 March 2015 during which P held the interest disposed of.

(4) Case 3 is that—

(a) the interest disposed of was held by P on 5 April 2016, and

(b) no relevant single dwelling interest was subject to ATED on one or more days in the period ending with 31 March 2016 during which P held the interest disposed of.

(5) For the purposes of this paragraph—

(a) “relevant single-dwelling interest” means the single-dwelling interest by reference to which Condition B in section 2C is met in relation to the relevant high value disposal, or, if Condition B is met by reference to more than one such interest, each of them;

(b) a relevant single dwelling interest is “subject to ATED” on a day if P—

(i) was within the charge to annual tax on enveloped dwellings with respect to that interest on that day, or

(ii) would have been within that charge but for the day being “relievable” by virtue of any of the provisions mentioned in section 132 of the Finance Act 2013 (ATED: effect of reliefs).

(6) In paragraphs 3 and 4, “the relevant year” means—

(a) in relation to Case 1, 2013;

(b) in relation to Case 2, 2015;

(c) in relation to Case 3, 2016.”

9 (1) Paragraph 3 is amended as follows.

(2) In sub-paragraph (1) for “post-April 2013” substitute “post-commencement”.

(3) In sub-paragraph (2)—

(a) for “post-April 2013” substitute “post-commencement”, and

(b) for “5 April 2013” substitute “5 April in the relevant year”.

(4) In sub-paragraph (5), for “6 April 2013” substitute “6 April in the relevant year”.

10 (1) Paragraph 4 is amended as follows.

(2) In sub-paragraph (1)—

(a) for “pre-April 2013” substitute “pre-commencement”, and

(b) for “post-April 2013”, in both places, substitute “post-commencement”.

(3) In sub-paragraph (2)—

(a) for “pre-April 2013” substitute “pre-commencement”, and

(b) for “5 April 2013” substitute “5 April in the relevant year”.

(4) In sub-paragraph (4) for “post-April 2013” substitute “post-commencement”.

(5) In sub-paragraph (5) for “pre-April 2013” substitute “pre-commencement”.

11 (1) Paragraph 5 is amended as follows.

(2) In sub-paragraph (1) for “5 April 2013” substitute “5 April in the relevant year”.

(3) In sub-paragraph (3) for “6 April 2013” substitute “6 April in the relevant year”.

(4) For sub-paragraph (6) substitute—

“(6) In this paragraph—

• “chargeable interest” has the same meaning as in Part 3 of the Finance Act 2013 (annual tax on enveloped dwellings) (see section 107 of that Act);

• “relevant year” has the meaning given by paragraph 2.”

12 In the italic heading before paragraph 6, for “assets acquired after 5 April 2013” substitute “or none of Cases 1 to 3 apply”.

13 In paragraph 6, for sub-paragraph (1)(b) substitute—

“(b) none of Cases 1, 2 and 3 in paragraph 2 applies to the disposal.”