Capital Gains Tax Act 1979 (repealed 6.3.1992)

[F1 126C Section 126 relief: emigration of controlling trustees. U.K.

(1) Subsection (2) below applies where—

(a) relief under section 126 above is given in respect of a disposal of an asset to a company which is controlled by the trustees of a settlement (“the relevant disposal”),

(b) at the time of the relevant disposal the person making it is connected with the trustees, and

(c) at a time when the company has not disposed of the asset and the trustees have not ceased to control the company, they become neither resident nor ordinarily resident in the United Kingdom.

(2) Where this subsection applies then, subject to the following provisions of this section, a chargeable gain shall be deemed to have accrued to the trustees immediately before the time mentioned in subsection (1)(c) above, and its amount shall be equal to the held-over gain (within the meaning of section 126 above) on the relevant disposal.

(3) For the purposes of paragraph (c) of subsection (1) above, the company shall be taken to have disposed of an asset before the time referred to in that paragraph only if it has made a disposal or disposals in connection with which the whole of the held-over gain on the relevant disposal was represented by reductions made in accordance with section 126(3)(b) above; and where the company has made a disposal in connection with which part of that gain was so represented, the amount of chargeable gain deemed by virtue of this of section to accrue to the trustees shall be correspondingly reduced.

(4) The disposals by the company that are to be taken into account under subsection (3) above shall not include any disposal to which section 273 [F2 or 273A] of the Taxes Act 1970 (transfers within a group) applies; but where the company disposes of an asset by a disposal to which [F3 either of those sections applies], the first subsequent disposal of the asset by another member of the group which is a disposal to which [F4 neither of those sections applies] shall be taken into account under subsection (3) above as if it had been made by the company.

(5) Where an amount of tax assessed on trustees by virtue of this section is not paid within the period of twelve months beginning with the date when the tax becomes payable then, subject to subsection (6) below, the transferor may be assessed and charged (in the name of the trustees) to all or any part of that tax.

(6) No assessment shall be made under subsection (5) above more than six years after the end of the year in which the relevant disposal was made.

(7) Where the transferor pays an amount of tax in pursuance of subsection (5) above, he shall be entitled to recover a corresponding sum from the trustees.

(8) Gains on disposals made after a chargeable gain has under this section been deemed to accrue by reference to a held-over gain shall be computed without any reduction under section 126(3)(b) above in respect of that held-over gain.

(9) Section 126B(3) above shall apply for the purposes of subsection (1)(c) above as it applies for the purposes of section 126B(2).]

Textual Amendments

F1 Ss. 126A–C added by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 para. 2 in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)

F2 Words inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 70(5)(a)(9)

F3 Words substituted by Finance Act 1990 (c. 29, SIF 63:1), s. 70(5)(b)(9)

F4 Words substituted by Finance Act 1990 (c. 29, SIF 63:1), s. 70(5)(c)(9)